The U.S. horticultural industry, grossing $13.8 billion in 2014 [U.S. Department of Agriculture (USDA), 2015], faces numerous challenges to maintaining successful, independently owned retail businesses (Hodges et al., 2011). Palma et al. (2012) reported that horticultural businesses are facing heightened competition and may be using relatively inefficient marketing channels (e.g., one-way communication through printed material such as phone books, catalogs, newspaper, or mail) to reach today’s online consumers, who increasingly use smartphones as portable search tools to gather information before making purchase decisions related to gardening products (Behe et al., 2013). High-quality online presence is essential for the viability of horticultural businesses; lack of modernization, however, coupled with often limited resources for developing online content, have resulted in slow adoption of new sales technology in small to medium enterprises, such as garden centers, nurseries and other horticultural businesses (Dahnil et al., 2014).
One way that smaller, independently owned horticultural businesses can potentially succeed is by expanding their customer base through ODS, or e-commerce. Rural businesses, in particular, could benefit from adoption of ODS to increase the viability and sustainability of their business across a broader marketplace than what is afforded with a brick-and-mortar store only. In this paper, we categorize ODS as online-shopping websites for retail sales directly to consumers or selling through online marketplaces [such as Amazon and eBay (San Jose, CA)]. In ODS, no transactions are conducted face-to-face. This is a virtual exchange of information where the customer inputs their contact and payment information in exchange for shipping and delivery of a product. Amazon is the largest ODS provider in the United States and accounted for 60% of online sales growth in 2015, a growth of $23 billion (Garcia, 2016). Historically, evidence indicates very few horticultural businesses participate in ODS (Avent, 2003; Stanley, 2002); however, more empirical evidence of horticultural businesses’ ODS sales volumes are needed.
Research investigating the adoption of ODS in other industries (Li and Xie, 2012; Li et al., 2011; Ng, 2013), indicates that ODS adoption is complicated. Many researchers have explored factors important to adoption of ODS from a business perspective (Table 1). Businesses struggle to understand the required technology for ODS adoption, and the relative advantage over previous technologies is confusing to many entrepreneurs. In a case study of ODS in Australian agribusiness, both internal and external factors were identified as equally influencing the adoption of ODS (Ng, 2013). Internal factors identified were resources available, target market segment and market scope, nature of products and services, technological infrastructure and knowledge, types of business strategy, organizational structure and culture, understanding of sales models, online and offline marketing strategies and objectives, and market positioning. External factors were strategic partners, competitors, type of industry, consultants, buyers and suppliers, government agencies, market trends, and environmental factors. In a separate study looking at small and medium-sized businesses’ adoption of ODS (Li et al., 2011), results indicated that many aspects of ODS are not clear to businesses until they make the decision to adopt, rendering the perception of “ease of use” complicated. Innovation or willingness and propensity for risk were significant factors in whether a business chose to adopt ODS. Researchers recommended making the benefits of ODS clear to small- and medium-sized businesses to encourage ODS adoption (Li et al., 2011).
Online direct selling attributes of interest from retailer’s perspective when considering adoption of a new technology such as online plant sales. Previous work by authors listed below describes factors important for successful implementation of ODS in any industry.
Another study looked at commonalities across research on the diffusion of ODS, which included work in multiple countries with multiple sizes and scopes of businesses (Li and Xie, 2012). Common factors among studied businesses were institutional environment, economic environment, sociocultural environment, firm size and structure, corporate strategy, globalization, managerial attitudes, external pressure, macro technology environment, and firms’ ability to navigate the technology landscape. Researchers grouped these factors into three categories: environment perspective, firm perspective, and technology perspective. After further analysis, researchers recommended businesses evaluate internal resources and consider whether the internal environment is friendly to ODS before beginning it. Additionally, businesses considering ODS should determine if the external environment is appropriate for ODS, including determining if delivery systems are in place for products, whether customers are ready to purchase online, and if the ODS system is reliable (Li and Xie, 2012).
From a consumer perspective, multiple factors influence the decision to purchase a product online. Researchers have explored these factors in other industries (Table 2), and results indicate that return policy, product quality, price strategy (Li et al., 2013), on-time delivery, terms of sale, pictures, shipping charges, and selection of product options (Dholakia and Zhao, 2010) are important factors for customers when choosing to purchase online. No previous studies have looked at how these characteristics translate to horticultural businesses.
Online direct selling attributes of interest from a consumer perspective when considering purchasing a product online. Previous work by authors listed below describes factors important to consumers of non-horticultural products in order for them to complete and be satisfied with online product purchases.
Selling plants on Amazon can be a challenging venture. While listing items for sale on Amazon is relatively straightforward, having a brand presence is considerably more difficult. Amazon does not allow website copy to direct or link to a seller’s own e-commerce site, nor does it allow advertising materials referring to another e-commerce website in packaging materials. In addition, seller requirements are strict, particularly when participating in the Amazon Prime 2-d shipping service, which can be difficult when shipping live plants. Amazon’s “Selling on Amazon” website indicated their pricing model for professionals included both a monthly fee ($39.99) as well as a per-item fee which varied by category. Additional fees applied when selling through “Fulfillment by Amazon,” a service which picks, packs, ships, and provides customer service for third-party sellers (Amazon Services LLC, 2018).
In recent years, Amazon’s presence in the live plant marketplace has increased at a rapid pace. A 2015 Business Insider article “Now Amazon will let you rent goats” (Ryssdal, 2015) noted Amazon’s entrance into the residential marketplace with their “Home Services” offerings. Few offerings were available outside of major metropolitan areas; offerings traditionally considered horticulture-industry services, however, were listed on the website: Examples included landscape maintenance, lawn mowing, aeration, over-seeding, snow removal, pruning, fertilization, plant health evaluation, planting, and mulch delivery. Essentially, this part of Amazon’s website helped connect consumers with local providers and took a percentage of the price as commission.
In 2016, the first industry e-newsletter article citing Amazon’s interest in the horticulture industry was published in GrowerTalks Magazine. The author suggested that Amazon could potentially do very well in the horticulture marketplace (Beytes, 2016). At the time, products available were primarily seeds, with increasing sales in the “Fresh Flowers & Live Indoor Plants” category. Perennials, herbs and a few 1-gal woody crops were also available. In 2017, Greenhouse Grower Magazine noted Amazon’s entrance into plant retail and suggested strategies growers should consider to navigate the coming marketplace changes (Miller, 2017). Shortly after that article was published, Greenhouse Grower Magazine profiled Costa Farms’ (Miami, FL) expanded customer footprint in the e-commerce market through its purchase of Delray Plants (Delray Beach, FL), an established ODS business (Drotleff, 2017).
In Oct. 2017, Amazon received approval for a patent (no. US 9779442) related to computer-assisted ability to “provide a recommendation for garden items” (White, 2017). As noted in GrowerTalks’ Acres Online e-newsletter (Beytes, 2017a), the online retailer has quickly moved into the live plant marketplace, opening the “Amazon Plants Store” (Beytes, 2017b), which features the Proven Winners brand of plants. The presence of this new online plant store has been rapidly picked up by the popular press in the United States (Price, 2018).
While Amazon provides an established infrastructure for ODS, selling via an independent e-commerce website allows greater flexibility, the opportunity for cohesive branding, and better opportunities for managing customer expectations and relationships. However, the burden of website platform development and product delivery rest solely on the business. Many factors must be considered when choosing whether to enter the ODS marketplace and it is not appropriate for every horticultural business. Education and resources for businesses considering entering the ODS market will help them be more successful.
The purpose of this study was to determine whether horticultural businesses were directly selling live plant products online, either on Amazon or from their’ own websites, as a way to benchmark the growth of ODS in the horticulture industry. The study also sought to describe sales characteristics of products available through Amazon from horticultural companies. The following research objectives guided this study: 1) determine if and how ODS is used by horticultural businesses on Amazon; and 2) determine if and how ODS is being used by horticultural businesses through businesses’ own websites.
Abrams, K. & Meyers, C. 2012 From opposite corners: Comparing persuasive message factors and frames in opposing organizations’ websites J. Appl. Commun. 96 54 67
Amazon Services LLC 2018Selling on Amazon. 4 Apr. 2018. <https://services.amazon.com/selling/benefits.html>
AmericanHort 2014AmericanHort: Our story. 4 Apr. 2018. <https://www.americanhort.org/page/our_story>
AmericanHort 2016AmericanHort: Spring 2016 membership list data set. 3 July 2018. <https://www.americanhort.org/page/WhyAmericanHort>
Ary, D., Jacobs, L.C. & Sorensen, C. 2010Introduction to research in education. 8th ed. Wadsworth Cengage Learning, Belmont, CA
Avent, T. 2003So you want to start a nursery. Timber Press, Portland, OR
Baker, L.M. & King, A.E.H. 2016 Let’s get theoretical: A quantitative content analysis of theories and models used in the Journal of Applied Communications J. Appl. Commun. 100 51 63
Barkley, D.L., Lamie, R.D. & Markley, D.M. 2007Case studies of e-commerce in small and medium-sized enterprises: A review of the literature. Clemson Univ., UCED Working Paper 10-2007-01. 4 Apr. 2018. <http://purl.umn.edu/112893>
Barnes, J., Hood, K. & Gallardo, R. 2014The economic impact of social media on small businesses: Evidence from three Mississippi extension programs. Mississippi State Univ., Dept. Agr. Econ. Working Paper 2323-15. 4 Apr. 2018. <http://purl.umn.edu/162500>
Barton, S.S. & Behe, B.K. 2017 Retail promotion and advertising in the green industry: An overview and exploration of the use of digital advertising HortTechnology 27 99 107
Behe, B.K., Campbell, B.L., Hall, C.R., Khachatryan, H., Dennis, J.H. & Yue, C. 2013 Smartphone use and online search and purchase behavior of North Americans: Gardening and non-gardening information and products HortScience 48 209 215
Berelson, B.R. 1952Content analysis in communication research. Free Press, New York, NY
Beytes, C. 2016Could Amazon dominate our industry? 3 Mar. 2016. <http://www.ballpublishing.com/GrowerTalks/ViewArticle.aspx?articleid=22164>
Beytes, C. 2017aAmazon, plants and customer expectations. 26 Apr. 2017. <https://www.growertalks.com/Newsletters/View/?article=2222>
Beytes, C. 2017bAmazon goes deeper into plants? 29 Dec. 2017. <https://www.growertalks.com/Newsletters/View/?article=2416>
Carr, A. 2017The future of retail in the age of Amazon. FastCompany Mag. 221:96-101,112-114. 24 Dec. 2017. <https://www.fastcompany.com/40491567/the-future-of-retail-in-the-age-of-amazon>
Chung-Hoon, P. & Young-Gul, K. 2003 Identifying key factors affecting consumer purchase behavior in an online shopping context Intl. J. Retail Distrib. Mgt. 31 16 29
Dahnil, M.I., Marzuki, M.K., Langgat, J. & Fabeil, N.F. 2014 Factors influencing SMEs adoption of social media marketing Soc. Behavioral Sci. 148 119 126
Dholakia, R.R. & Zhao, M. 2010 Effects of online store attributes on customer satisfaction and repurchase intentions Intl. J. Retail Distrib. Mgt. 38 482 496
Drotleff, L. 2017Expanded customer footprint, e-commerce, succession key aspects of Delray Plants purchase by Costa Farms. 14 Mar. 2017. <https://www.greenhousegrower.com/management/expanded-customer-footprint-e-commerce-succession-key-aspects-of-delray-plants-purchase-by-costa-farms/>
Garcia, T. 2016Amazon accounted for 60% of U.S. online sales growth in 2015. 15 May 2016. <http://www.marketwatch.com/story/amazon-accounted-for-60-of-online-sales-growth-in-2015-2016-05-03>
Hodges, A.W., Hall, C.R. & Palma, M.A. 2011 Economic contributions of the green industry in the United States, 2007-08 HortTechnology 21 628 638
Krippendorff, K. 2013Content analysis: An introduction to its methodology. Sage Publ., Thousand Oaks, CA
Lee, J., Park, D-H. & Han, I. 2011 The different effects of online consumers’ purchase intentions depending on trust in online shopping malls: An advertising perspective J. Internet Res. 21 187 206
Li, X., Troutt, M.D., Brandyberry, A. & Wang, T. 2011 Decision factors for the adoption and continued use of online direct sales channels among SMEs J. Assn. Info. Systems 12 1 31
Li, Y., Xu, L. & Li, D. 2013 Examining relationships between the return policy, product quality, and pricing strategy in online direct selling Intl. J. Prod. Econ. 144 451 460
Miller, C. 2017Amazon is coming to plant retail: Here’s what it means for growers. 2 Feb. 2017. <http://www.greenhousegrower.com/management/retailing/amazon-is-coming-to-plant-retail-heres-what-it-means-for-growers/>
Ng, E. 2013 Making strategic decisions on B2B e-commerce models: An empirical study on Australian agribusiness Intl. J. Electronic Commerce Studies 4 1 20
Palma, M.A., Hall, C.R., Campbell, B., Khachatryan, H., Behe, B.K. & Barton, S.S. 2012 Measuring the effects of firm promotion expenditures on green industry sales J. Environ. Hort. 30 83 88
Price, E. 2018Amazon just launched a ‘plants store’. 21 Feb. 2018. <http://fortune.com/2018/02/21/amazon-plants-store/>
Riffe, D., Lacy, S. & Fico, F.G. 2005Analyzing media messages using quantitative content analysis in research. 2nd ed. Lawrence Erlbaum Assoc., Mahwah, NJ
Rogers, E.M. 2003Diffusion of innovations. Free Press, New York, NY
Ryssdal, K. 2015Amazon will now let you rent a live goat. 22 Apr. 2015. <http://www.businessinsider.com/amazon-will-now-let-you-rent-a-live-goat-2015-4>
Sparks, B. 2018aHow you can tackle online plant sales. 2 Feb. 2018. <http://www.greenhousegrower.com/management/the-latest-on-amazons-online-plant-store/>
Sparks, B. 2018bThe latest on Amazon’s online plant store. 7 Feb. 2018. <http://www.greenhousegrower.com/management/the-latest-on-amazons-online-plant-store/>
Stanley, J. 2002The complete guide to garden center management. Ball Publ., Batavia, IL
U.S. Department of Agriculture 20152014 census of horticultural specialties. 5 May 2016. <https://www.agcensus.usda.gov/Publications/2012/Online_Resources/Census_of_Horticulture_Specialties/HORTIC.pdf>
U.S. Department of Agriculture2013. 2013 rural-urban continuum codes data set. 4 Apr. 2018<https://www.ers.usda.gov/data-products/rural-urban-continuum-codes/>
Wells, E. 2018Amazon can’t match us. 4 Jan. 2018. <https://www.growertalks.com/Newsletters/View/?article=2420>
White, J.D. 2017Amazon patents garden service. 22 Dec. 2017. <https://www.growertalks.com/Newsletters/View/?article=2412>