The Canadian wholesale and retail SME The Rusty Shovel is a one-stop shop for landscaping needs. Digital tools enabled them to manage their customer relationships more efficiently and increasing sales by over 40% in only two years. During the pandemic financial support from the government was essential to balance the impact of the disruptions in sales.
Canadian landscaping retail SME increases sales by over 40% by selling online
Abstract
The Rusty Shovel Landscape Shop is an independent landscape design and supply shop in Regina, Saskatchewan, Canada. The company supplies the landscape construction sector selling materials for irrigation, hardscapes, artificial turf, water features, landscape rocks and other purposes. They operate 60% in wholesale and 40% in retail, employing 7-10 full time staff and up 25 employees during high season.
In 2020 and 2021 the pandemic caused supply chain issues that led to a sizeable loss in sales. As a result, the company over committed to inventory in 2022, increasing their need for warehouse space, which represented an additional burden on the company’s cash flow and debt. Moreover, the rising fuel costs as well as carbon taxes contributed to inflate prices and lower margins, as the company’s products are freight intensive.
Since its creation in 2008 the company is applying a digital lead generation and fulfilment strategy to efficiently manage their customer relationships. They use the software Keap to automate the lead generation, status tracking and sales funnels. In 2015 they opened an online store on an e-commerce platform. In 2021 they added an interactive data visualisation software to improve reporting from their digital accounting tool.
In 2018 the company started to improve their sales funnels, by adopting an email marketing and sales platform which includes Customer Relationship Management (CRM) features, and which allowed them to track and improve each step in the selling process. Following their time investment in the digitalisation of the lead generation, the company observed an increase in sales revenue of over 40% by 2020. The trend of growing revenues due to an increase in e-commerce activities such as online sales is observable throughout OECD countries. According to data from an OECD survey on e-commerce, from 72% of companies that already sold online before the pandemic, such as The Rusty Shovel, 44% experienced a significant increase in online sales (OECD, Forthcoming[1]).
Besides the increase in online sales, the digitalisation of data management activities represented substantial efficiency gains for the company, enabling them to free up their staff from tedious, repetitive, manual tasks. The automation of activities like scheduling, payments and reminders allowed staff to focus on more important and valuable activities.
During the pandemic The Rusty Shovel received wage subsidy funds as well as a $40,000 interest- free, partially forgivable loan from the Canada Emergency Business Account.
OECD (2021), The Digital Transformation of SMEs, OECD Studies on SMEs and Entrepreneurship, https://dx.doi.org/10.1787/bdb9256a-en.
OECD (2021), SME Digitalisation to Build Back Better, https://doi.org/10.1787/f493861e-en
References
[1] OECD (Forthcoming), SMEs in the Era of Hybrid Retail: Evidence from an OECD D4SME survey.
