Familiarity, accessibility breed e-success - Brief Article

Home Channel News, March 5, 2001 by Lisa Girard

Egarden attracts distributors with language, visual imagery that industry folk recognize

In the world of high technology, the personal touch still counts.

When Egarden -- the business-to-business e-marketplace subsidiary of U.S Home & Garden -- launched at full capacity in February, Robert Kassel, U.S. Home's CEO, made sure the site used language and visual presentations that people in the industry would know and understand.

"Most of the people dealing with the supply chain side are nor necessarily inculcated in the technology age with computers, but are more comfortable with their fax machines and telephones," Kassel said. "It's very scary for a guy in our industry to get on a site that doesn't look like what he's used to. Unless those kinds of components are built into the site, it can't succeed."

U.S. Home & Garden makes a variety of lawn and garden products that includes landscape fabrics, weed trimmers, replacement heads and fertilizer spikes, which are are sold under brand names like Weed-block, Jobe's, Emerald Shade Fabric, Ross and Tensar.

Egarden, which was up partially for five months prior to the launch, has emerged as one of the more successful and widely implemented e-marketplaces in the home improvement field. One reason for its popularity seems to be that it employs online order forms and terms and conditions that are similar to those used throughout the industry. It also features an auction and wholesale marketplace that delivers online supplier data, and an illustrated search function with larger photos that facilitates locating and purchasing goods.

"Quite simply, we built it around the way we do business today," Kassel said.

That accessibility appeared to be one of the reasons why Orgill, the industry's largest independent hardlines distributor, decided last month to partner with Egarden. Orgill joins the industry's four largest dealer-owned buying groups -- Ace Hardware, TruServ, Do it Best and United Hardware Distributors -- that have their own "rooms" on Egarden's site which allow affiliated dealers to see and order merchandise. The potential business for this marketplace is enormous, as these distributors generate more than $7.5 billion in aggregate lawn and garden product sales annually.

Orgill's dedicated site would allow its 5,000 dealer clients access to more than 50,000 lawn and garden and outdoor accessory lines from more than 175 suppliers. Jerry Cardwell, Orgill's vp-electronic commerce, explained that this Web-enhanced program lets dealers go into Orgill.com and generate purchases of live-good type products via an online portal. "It adds speed, accuracy and efficiency to the process. And it will increase the customers business because he has access to more products. The entire supply chain benefits."

TruServ is also excited about its partnership with Egarden, which gives its dealer-members the ability to search multiple suppliers' products simultaneously, including small, regional vendors that sell unique goods. Dave Meder, general manager of TruServ's garden center division, said the dedicated "room" educates members about how to use the Internet to buy merchandise, check stock, find out vendors' names and go to vendor sites. Retailers benefit on the local level through auctions, logistic services, industry news and an events calendar.

TruServ is also using Egarden to set up a "virtual nursery market," which mimics its spring Dealer Market for certain product lines. Previously, members only had such product access at TruServ's trade shows. Now, they can visit Egarden, identify available merchandise, see product photos and place orders online.

"Now they can be assured that they have access to these products and that they won't already be sold to others," Meder explained. "If they waited until the fall show to place orders, a lot of product wouldn't be available. Some products take up to five years to grow and are in high demand."

Kassel said that February was a good month to launch the site, since the spring selling season for smaller retailers is just kicking off. Egarden has a technical staff of 28 sales representatives that is helping customers use the site and place orders.

Now the trick will be turning a profit. Last month, U.S. Home & Garden reported that through the six months ended Dec. 31, 2000, it lost $5.7 million, of which $1.9 million was attributable directly to Egarden's development and expansion. (The company did nor break out subsidiary sales data.)

Kassel believes that other category marketplaces, such as the business-to-consumer site Garden.com, have failed owing to their heavy live goods focus. "Jr's hard enough to enter the business with things that can be easily shipped, but with perishable goods, it just becomes an incredibly difficult task," he said. Kassel also noted that while there are two or three major growers that capture about 50 percent of the industry's business, the other half is divided among dozens of companies, many of them small or regional nurseries.

"It's very hard for them to break away from that structure and go to a national level," Kassel said. "We're used to shipping all over the country, but a guy in New Hampshire or North Carolina who grows rhododendrons is not used to shipping to California or Nevada. It's a daunting task to build that kind of system.