It's easy in our trade to point at the mass merchants as the prime competition for smaller independent garden centers. When you go to Home Depot or Lowe's and see the line of people snaking out the door on a sunny weekend, you might think, "That's where all my customers went". After all, the box stores most resemble our brick and mortar operations in that you have to go to the store and buy stuff.
What we need to notice is not so noticeable. It's the power of The Internet to draw business from your store. You don't see the people who now buy their fertilizer online instead of from you. They might still shop at your store, but the total sale might be smaller since their gardening dollars are being used to buy more stuff online. It will become increasingly probable that the customer will still come to your store to buy some potting soil for the citrus tree they bought online. They might still come to your store for advice, for the succulents they bought online. They don't need fertilizer since the succulent place sold them some. Of course, as soon as they can get real time advice online they won't even need to come into your store and bug you with their questions.
This could be quite depressing for the small garden shop, or it could be invigorating depending on how you look at it. What can I say? I do much of my shopping online now. I buy locally roasted coffee online. I support a local business this way, and get really great coffee beans shipped to my door. This doesn't have to be the end of the small, local garden shop. People do want to support smaller local businesses, but only if they do it better than larger concerns. We worry that we can't compete with the bigger players online. That assumes that those already online are doing it right. What if you could take the the small garden shop concept and offer it to more potential customers online?
Your biggest competitor could be another small garden shop that decided instead of fighting change, to roll with it. They offer the same great service you do, but to a larger audience. They ship quick, offer free real time advice, and enjoy the good will of customers who feel they are supporting a small, well run operation. Sure it would be nice to have that fertilizer customer come into your brick and mortar store. They would be able to enjoy the ambiance, and maybe see some other stuff they want. You know what? They just want to get that fertilizer. They don't have time to come and visit your store. If you don't make it easy to buy it from you, they will buy it somewhere else that is more accommodating to their needs.