2005 retail florist of the year

Strong promotions, outstanding service and fabulous products attract customers and keep Palmer Flowers & Decorating Gallery growing.

by Shelley Urban

Floral shops are among the few types of retail businesses that conduct significant sales over the phone, without ever seeing or meeting consumers, and, often, without the customers ever seeing the purchased products. In fact, some florists strive for strong phone sales, aspiring to achieve 80 percent, even 90 percent, of revenues from telephone orders, perhaps because these types of transactions can be quicker, easier and more cost-effective than in-store transactions. They can also allow for greater labor efficiency, since designers can focus on designing rather than talking to walk-in shoppers, some of whom might be browsing with no intention of purchasing.

But none of these efficiencies really matter at Palmer Flowers & Decorating Gallery because focusing on strong phone sales, which might seem penny-wise, could actually be a bit pound-foolish. That’s why Spiro Palmer, CEO of this 29-year-old shop in Fort Collins, Colo., maintains a much different business philosophy. He knows that if customers visit stores well-stocked with fabulous products, they can’t help but buy. And they’ll spend more, and come back more often to spend again, if they smell, see and touch all the wonderful merchandise for themselves.

So Mr. Palmer and his staff work hard to build in-store traffic. As a result, fully 60 percent of his company’s annual revenues—which have reached an impressive $3 million, the majority of which are fresh flowers and plants—is derived from walk-in sales.

Keeping sales strong even during the slower economic climate of the past several years—the shop experienced a 45-percent increase in sales from 1998 to 2003—with an almost nonstop schedule of creative advertising and promotions; top-notch customer service; and a seductive, ever-changing shopping experience that continues to allure new and established customers, has enabled Palmer Flowers to grow tremendously, both financially and physically. As a result, throughout the shop’s history, the staff have become well-acquainted with success, winning numerous awards over the years, including having been voted the best florist in Fort Collins for the past seven years.

For 2005, they have another award to add to their impressive list of achievements: Retail Florist of the Year. Conferred upon Palmer Flowers & Decorating Gallery by the Wholesale Florist & Florist Supplier Association (WF&FSA) and Florists’ Review, who jointly sponsor the annual competition, the prestigious award includes a $1,000 cash prize. In a recent conversation about their win, Mr. Palmer and his associates shared what makes them winners, in the floral industry as well as the retail arena.

In the early 1900s, members of the Palmer family, who had immigrated from Greece and put down roots in Joliet, Ill., opened the first Palmer family flower shop. Family members shared their craft with subsequent generations, some of whom migrated westward. In 1976, Spiro Palmer, who learned the business from his brothers, Leo and Paul, who had opened shops in Boulder, Colo., brought the family tradition to Fort Collins, opening Palmer House Florist along with his wife, Angela. It was a tiny shop in the downtown district of this northern Colorado community, which, at the time, was populated by a mere 35,000 residents. Today, the population of Fort Collins, home to Colorado State University, has more than tripled, to almost 127,000.

A mere six years after its inception, Palmer House was almost bursting at its 1,000-square-foot seams. Clearly, expansion was required for the company to grow, and Mr. and Mrs. Palmer, whose vision of their company’s future had expanded along with their burgeoning business, multiplied the shop space 10 times over when they relocated into a growing Fort Collins neighborhood. This impressive 10,000-square-foot retail space afforded the opportunity to create lots of enticing in-store displays, and customers couldn’t get enough of the lavish flower-and-plant-filled showroom.

To further serve its ever-expanding customer base and to reach new consumer markets, a second retail space was acquired, so the company could offer home interior items, including “silk” florals and home décor, such as furniture, fine art and home accents. That’s when, in 1996, positioned adjacent to the flower shop, the Palmer Decorating Gallery was born.

The two businesses were combined in 2004 in a nearly $1 million expansion project, which resulted in the 25,000-square-foot facility that now houses Palmer Flowers & Decorating Gallery as well as the Palmer School of Floral Design, established and directed by Mrs. Palmer, who is also a founding member of the Colorado Retail Florists Association. (See the sidebar on page 44 for more information on the school and its design certification program.)

In its own right, Palmer Flowers is a destination venue, offering one-stop shopping for a variety of decorating and gift-giving needs. Yet years ago, the Palmers envisioned a more complete line-up of home and lifestyle services to attract clientele from Fort Collins and neighboring communities, including those in nearby Wyoming and Nebraska.

To accomplish this goal, Mr. Palmer established yet another business, the Palmer Design Center, in a strip shopping center he owns just north of the Palmer Flowers & Decorating Gallery location. The 20,000-square-foot Design Center is occupied by six independent businesses whose products and services, such as custom-built cabinetry, high-end flooring and window and door replacements, attract the same types of clientele as Palmer Flowers.

Therefore, the Design Center’s location and core businesses, which were individually selected by Mr. Palmer, help draw steady streams of consumers to the area. And the affiliation has other benefits as well. “Because we serve many of the same clientele,” mentions Mr. Palmer, “we’re able to share customer information and plan joint advertising and promotions.”

But enticing nearly 20,000 guests annually into Palmer Flowers requires more than just a high-traffic location. Consistent marketing and promotions remind customers of all Palmer Flowers has to offer, and incentives attract new clients as well as encourage loyalty among long-time customers. In fact, Marie Kirkpatrick, who handles marketing, estimates that 80 percent of the company’s business is from satisfied repeat customers.

An all-important aspect of Palmer Flowers’ marketing program is traditional advertising, the budget for which, in 2004, totaled $195,000. This represents 6.5 percent of Palmer Flowers’ $3 million annual revenues.

According to Ms. Kirkpatrick, the largest portion of the budget, some $85,000, was allocated for newspaper advertising, including as many as six full-page color ads and about 300 smaller ads. An additional $55,000 went toward what she calls “fixed advertising”—Yellow Pages, the company Web site, wire-order expenses and so forth. In other traditional advertising, about $15,000 was spent on the company’s 250 or so radio spots for the year, most of which are concentrated into 48 ads per week during several selected weeks throughout the year.

The remaining $40,000 of the advertising budget went to producing and sending a wealth of direct-mail pieces, to both existing customers and new prospects. Regular mailings, highlighting various promotions, new products and special events, ensure top-of-mind awareness for Fort Collins residents, who compose 70 percent of the company’s customer base.

Among the most important special events are the shop’s two open houses, one celebrating spring and the other celebrating the holiday season. For the 2005 spring open house, which was held in early April, Ms. Kirkpatrick says that a custom-printed postcard mailer was sent to 6,000 clients and prospects. The postcard described the event and offered a discount to anyone who presented it during the open house.

The mailers, paired with a two-week print ad campaign, draw considerable walk-in traffic. “We’ve been doing the spring open house for five years, and we consistently see about 2,000 walk-ins each year,” Mr. Palmer confirms.

Michele Adams, Palmer Flowers’ general manager/buyer, says that, among regular customers, the open house is the must-attend event of the season. “It’s something that everyone really looks forward to. We show all the season’s new products and colors, we give roses to the ladies and, of course, serve refreshments,” she mentions.

And those who attend aren’t just browsing, they’re buying. “The spring open house is profitable,” confides Mr. Palmer, “but that isn’t why we do it,” he adds. “The main purpose is to get customers into the store.”

This strategy of getting customers in is one that many retailers, in all types of industries, rely on for strong sales, and the Palmers know it works for floral shops, too. But even if guests don’t make purchases on the first visit, or the second for that matter, it’s clear, to the folks at Palmer Flowers at least, that shopping equals sales.

In addition to the open-house events, Palmer Flowers relies on various incentives to maintain its brisk walk-in sales. A frequent-buyer card is one such incentive. The card is stamped for every $10 spent on fresh flowers and arrangements. After 10 stamps, or $100 spent, customers can redeem the card for $15 worth of fresh flowers.

This incentive is among the most important of the loyalty programs that Palmer Flowers offers. “For every sales transaction, customers are asked if they have frequent-buyer cards,” says Ms. Adams, “and buyers who don’t have cards are offered them.”

She also reports that, as a service to customers, frequent-buyer cards are kept on file in the shop, so customers don’t lose or forget about them. “On average,” adds Ms. Kirkpatrick, “four or five cards are redeemed per week.”

Another promotion that attracts throngs of walk-in customers is “Fresh Flower Happy Hour.” This program, offering half-price flowers on all fresh stems except roses, which are offered in bunches at promotional prices, is more than just a Friday afternoon or weekend special. Instead, Palmer Flowers offers half-price cut flowers, including a wealth of tropical blossoms, from Thursday through Sunday; however, the program runs only during summer and fall. “This way, we’re able to attract customers at times that might be a little slower than others,” explains Ms. Adams.

Discounts and sale pricing, sometimes as much as 40 percent or more on regular merchandise (rather than seasonal closeouts, for example), also attract customers throughout the year. “Of course, discounts come out of the bottom line,” Mr. Palmer notes, “but they’ve proven to work really well. We use them to attract new customers, and our regular clientele appreciate the opportunities to purchase products at reduced prices, too.”

Once customers are tempted inside the store, they soon realize that this is a retail domain quite unlike most others. First, upon entering the massive facility, which is done through one well-marked, highly visible set of central doors, customers walk into a sunlight-filled atrium where a wealth of lavish green plants and seasonal merchandise, which is changed regularly to keep displays interesting for returning customers, hint at the treasures to be found within.

To the left is the decorating gallery, where exquisite permanent plants and floral arrangements are merchandised among collections of fine art, stylish home furnishings, decorative accessories and much more. Prices in these sections, which are arranged according to color or style themes, range from $10 to $1,700, but the average gallery sale is $95.

To the right of the atrium is the flower shop, where some 1,400 square feet of walk-in cooler space is filled with gorgeous cut flowers and striking fresh arrangements. This space also includes about 400 square feet devoted just to the 25 or so varieties of tropical cut flowers in a special moderate-temperature cooler. Basic containers and some green and blooming plants can be found here, as well.

Prices, even for arrangements, start at $9.99. Although the average ticket for this department is $45, fresh arrangements sell for as high as $250.
The majority of the company’s fresh flowers are grown domestically. In fact, Mr. Palmer reports that about 50 percent of his cut flower purchases are grown in California and about 20 percent are tropicals grown, predominantly, in Hawaii. The remaining 30 percent are imported from South America.

Mr. Palmer explains his company’s relatively unusual reliance on American sources this way: “We want to support domestic growers,” he says, “and we also find that we get great results with California products because they are [kept consistently cold when they are] transported to us on refrigerated trucks.” He also points out that Palmer Flowers has a 29-year relationship with some cut-flower growers, so he knows he can count on them to supply large quantities of product—as many as 200 boxes or more at the holidays—when he needs it.

Directly across the store from the atrium, Palmer Flowers’ 1,800-square-foot greenhouse beckons customers. Here, pristine collections of blooming plants and other in-season items are on display in enticing gardenlike settings that, like all the shop’s displays, encourage browsing. There’s also a “lucky-bamboo bar,” from which customers select items, such as containers, stones and stems, to create their own lucky-bamboo arrangements.

In every department, especially the decorating gallery, much of the merchandise would be hard to find elsewhere. For example, few other florists in the region carry the variety of fresh flowers that Palmer Flowers does, especially roses (10 to 15 varieties on hand daily) and tropicals, which account for 20 percent of the shop’s fresh flower sales and are especially popular for Mother’s Day and other holidays.

Buyers also work hard to find furnishings and accessories that aren’t available at other outlets. According to Mr. Palmer, that’s part of his company’s appeal with consumers. “One of the main reasons customers come here,” he shares, “is because we provide products that are unique to us. We watch what our competitors sell, and we avoid those same products. It’s part of our strategy to make the buying experience enjoyable and to keep customers coming back.”

And since customers do come back again and again, regular display changes and fixture updates are a necessity. “Every year, we upgrade our fixtures and create new looks,” points out Mr. Palmer. “We also rotate lots of different merchandise through our displays, including those inside the cooler, to change them regularly—more than seasonally,” Ms. Adams adds.

Oftentimes, before guests entering the building can decide which direction they should turn, they’re greeted warmly by sales staff, who, when they’re not helping customers in the showrooms, are stationed at one of two sales counters just inside the door. Depending on the season, relates Ms. Adams, as many as three or four sales staff are on duty in the flower shop at all times while two or three staff help customers in the gallery. And, she adds, “sales staff are cross-trained to work in both areas, so if the need arises, the departments easily can assist each other.”

But friendly greetings and helpful guidance are just part of the excellent customer service that makes local residents and folks from surrounding communities keep coming back to Palmer Flowers & Decorating Gallery. What’s perhaps more important is that all staff follow the “golden rule” of customer service.

“We treat each of our guests the way we would want to be treated if we were the customers,” assures Mr. Palmer. He says that every staff member strives to make customers feel special and to recognize that customers’ needs are important, not trivial.

Another aspect of top-notch service is demonstrated with high-quality flowers that offer the maximum possible vase life and are delivered within just an hour or two of order placement. “Ninety minutes to three hours is the typical delivery wait time, and we’ll guarantee even faster deliveries for an added cost,” Mr. Palmer informs.

In addition, utilizing the latest post-harvest technology in a climate-controlled space devoted to flower processing is the first step to ensuring that cut flowers receive the best possible care. And that, along with proper rotation and flower use, provides consumers with optimum vase life.

Keeping product rotated requires that both arrangements and loose stems are date-coded, so nothing stays in the cooler too long. “We move everything within three or four days,” Ms. Adams points out.

She also mentions that sales staff walk through the coolers two or three times daily, so they’re aware of what items need to be sold that day, and designers utilize loose stems from the display coolers, rather than just their workroom storage cooler, as needed to help minimize waste.

The foundation of excellent customer service, though, is outstanding employees. “We recruit ‘stars,’” says Mr. Palmer, “which is part of the reason we started the design school.”

However, excellent employees won’t stay if there’s a better place to go. As a result, Mr. and Mrs. Palmer strive to make their business among the best places for employees to work and grow, and, in February, they were recognized for their efforts
when Palmer Flowers was named the “best place to work” by the Fort Collins Coloradoan.

The benefits package, which includes paid vacations, a 401(k) plan, health and life insurance, sales goal incentives and discounts on merchandise and floral design school tuition, is as generous as any in the retail industry. And employees are treated as valuable members of the Palmer Flowers family who are given opportunities to achieve their full potential.

“We value our employees and ask for their input,” Mr. Palmer explains. “We also encourage them to achieve more by letting them know that we’re confident they can develop new skills and perform in new roles with new responsibilities, if they want to,” he continues.

As a result, the average tenure for the shop’s 45 to 50 employees is about 5 years, and some staff have been with the shop for much longer. Ms. Adams, for example, has been with the company for 27 of the 29 years it’s been in business.

Great benefits and a great working environment make for happy employees, and happy employees are critical components of outstanding service, which is required for building a base of satisfied customers. And when these elements are joined with consistent advertising, enticing promotions and a wealth of fabulous products in an always-inviting atmosphere, it’s truly a winning combination on which a successful business, like Palmer Flowers & Decorating Gallery—the 2005 Retail Florist of the Year—can be built.

• To read about the Runners Up in this years competition, click here.

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