GartnerGroup
Advisory Services

Case Study RU

Carol Rozwell
Charles Abrams

PlantFind.com: The Dot-Com That Could

Summary:

PlantFind.com, a B2B commercial site for the wholesale landscape and nursery industry, thrives despite competitive dot-com failures. We examine the key survival tactics and success factors that give it a "green thumb" for growth.

Core Topics:

E-Business Adoption ~ E-Business

Primary Key Issue:

How will e-business adoption improve operational performance, increase revenue, reduce expenses and accelerate earnings growth?

Body:

The landscape and nursery industry (i.e., the "green industry") is a large, highly fragmented market encompassing more than 456,000 businesses in the United States alone. The trade among landscapers, growers, wholesalers and retail garden centers amounts to $170 billion each year. PlantFind.com's marketplace site is designed to efficiently connect buyers and sellers by delivering an automated solution for the acquisition, sale and distribution of the goods and services necessary to operate in the growing business.

Problem:

The green industry faces a problem that is typical of any large, dispersed market with many buyers - typically retail garden centers and landscapers - attempting to purchase plants and materials from any number of sellers, e.g., brokers, wholesalers and growers. Information is patchy, is often inaccurate and goes out of date very quickly. There are thousands of horticultural products available, and they are frequently known by different names in multiple languages. A search for "lilac" could return a listing for a plant in the genus Syringa or a color of Buddleia davidii. This makes it difficult for a buyer to easily locate the plants or other items, such as hand tools or irrigation supplies, that are needed for a job.

Consider a typical situation: a landscaper needs to find a variety of items for a client. The landscaper consults a directory published earlier in the month, in which the growers or wholesalers listed their available stock. Traditional processes are usually time-consuming and inaccurate, as print-based data sources do not reflect current pricing and stock availability. The buyer eventually locates the items it needs - often from more than one source - and calls or sends a fax to reserve the items. Since the listing was obsolete the day it was published, the items may be out of stock when the inquiry is placed. So the process is repeated until the desired items are found. Even when the items are available, it can take anywhere from one to three weeks to confirm the order. The large average size of transactions, and the large number of specific items ordered, further complicates traditional processes.

PlantFind.com entered the dot-com landscape in 1999 amid a flurry of competitors aiming to simplify this complex series of interactions. In November 2000, there were at least 17 competitive sites. Competitive sites provided free listings of available inventory and charged a transactional fee based on an average of 5 percent of sales. PlantFind.com was one of two sites to "go the extra mile" and allow the buyers and sellers to transact business without a fee.

Objective:

PlantFind.com started out with limited funds and the need to earn a profit within 36 months of inception. What it lacked in venture funding it made up for with low development costs, a simple and reliable home-built transactional infrastructure, and an experienced management team that understands the impact of electronic commerce on the transformation of the landscape and nursery industry. It went public with its Web site in January 2000, offering a basic set of functions, all geared at streamlining a convoluted process. PlantFind.com's initial objectives were to lower costs, increase margins, speed up transactions and streamline business processes. It addressed the needs of all potential marketplace participants.

• Landscape architects and contractors: PlantFind.com determined that this group of users primarily needed access to an exchange for job costing, bidding, invoice submittals and project management control.
• Related product and service providers: These primarily needed to use PlantFind.com as a central e-marketplace to enhance production by providing a central e-business marketplace for goods and services.
• Sellers primarily needed to use PlantFind.com to respond to pricing changes, capitalize on market opportunities and post real-time inventories.
• Buyers needed to use PlantFind.com to search through a database for horticultural goods, hard goods, and industry-related products and services for their direct and indirect needs. The primary goal in servicing this group was to cut down on search times required to locate products from multiple sources, accessing information that was frequently inaccurate and out-of-date.

Approach:

PlantFind.com's initial operating strategy was quite simple: It aimed to build the leading B2B portal for the landscape and nursery, or "green," industry. "Content info. gorge" - the fact that there are literally tens of thousands of varieties of plants, available from thousands of suppliers - made this a natural for a Web-based portal. PlantFind.com's initial proposition to participants was:

• Use robust search capability to find needed plants and botanical supplies quickly out of millions of entries on site
• Locate a supplier from the thousands of suppliers online
• Receive RFQs for products via e-mail or wireless (a multichannel approach)
• Advertise their company, products and services online today through individual storefronts
• Conduct exchange transactions and RFQs on an unlimited basis - without a transactional fee - as a membership benefit

PlantFind.com has since added a self-developed RFQ facility, allowing buyers and sellers to share information and conduct business online. It also added the functionality that allows members to:

• Easily manage their own storefront and company listing
• Quickly add and update their catalog online
• Search for the materials needed for the next project
• Expand the customer base
• Use wireless notification for orders and status updates

Results:

PlantFind.com's nonthreatening approach has allowed it to establish a central position between buyers and sellers, an extensive community of members. It currently has more than 3,700 member companies, including seven of the top-10 growers. Since the launch of the RFQ services, buyers have registered $17.9 million in plant purchases.

PlantFind.com provides:

• Dependable security
• Seamless transactions
• Fast order processing
• Valuable industry research
• The ability to help expand and grow business in a global market
• The revenue stream has two components:
• Fees collected from members who access the portal
• Fees collected from members who use business software created by PlantFind.com to manage their businesses

Critical Success Factors/Lessons Learned:

PlantFind.com succeeded where others have failed because it paid attention to the basic tenets of good business:

1. Realistic financial approach - PlantFind.com chose to keep development costs low to avoid an unnecessary financial burden. It does not charge transaction fees and instead relies on the membership fees and software sales for a steady stream of revenue. This was the financial strategy from day one.
2. Systematic analysis of target market - It knows what functions "typical" users need to grow their business, and it provides them. Ease of use, categorization of content and usability are key content success factors.
3. Multichannel approach to content management - It acknowledges that many of its members need to send/receive information from "the field" (literally), so it can transmit to cell phones and PDAs.
4. Respected management team with an extensive industry network - Since the founders grew up in the industry, they have the background to define the problems and build solutions to solve them. They also were astute enough to seek partnerships with major industry publications.

For continued success, PlantFind.com will need to continue to expand its membership while expanding the range of services offered to its target members. It will probably need to augment subscription revenue with advertising sales and ancillary marketing revenues - for example, sponsorship sales from partners, such as several print magazine publishers with which it is currently partnered.

Bottom Line:

Other dot-com marketplaces that have survived the current fall-out, brick-and-mortar organizations and new entrants should evaluate PlantFind.com's success factors in laying short, tactical steps to success. In the year of the e-business gap, it proved that sites that 1) operate in a space devoid of "800 lb. gorillas," 2) offer focused business functionality to a targeted set of members and 3) can quickly attract a critical mass of participants may buy enough time to weather the storm of anti-marketplace sentiment.

For more information, visit PlantFind's website www.PlantFind.com, send an email to info@plantfind.com, or call 1.877.473.3363.