survive and thrive in 2006, florists will have to change directions and
point toward creating experiences, value and strong customer
by O. STANLEY POHMER JR.
TO SAY THAT 2005 WAS A CHALLENGING YEAR for traditional retail
florists and floral wholesalers is an understatement. Consumer
confidence was challenged by an on-again/off-again economy, with many
consumers worried about job security. And many of those who felt
confident about their employment status found their disposable spending
Wage increases barely kept pace with inflation, but real spending power
was reduced due to higher energy costs, higher health care costs, rising
interest rates and the like. People were worried about the basic
necessities and essentials such as keeping food on the table, putting
gas in the car and paying the rising costs of college for the kids, more
often deferring “affordable luxury” purchases like flowers.
sales drop while costs rise
Retailers of all types—florists, warehouse clubs and supermarkets—tried
to entice elusive consumers with lower retail price points, but that
didn’t work. For instance, in the third quarter of 2005 (from when we
have the latest available consumer purchase behavior data), supermarket
cut flower sales were down 9.6 percent, and purchase transactions were
off 3.9 percent. During the same period, florists’ cut flower sales
deteriorated by 28.5 percent, and the number of transactions decreased
15 percent. While there are other mitigating circumstances, what we saw
in 2005 clearly demonstrated that lower retail prices don’t necessarily
increase the perceived value of flowers in consumers’ minds.
In addition, the insanity of reducing retail prices in an attempt to
capture sales came at the same time that florists’ operating costs were
increasing. Fuel surcharges on inbound product, higher heating costs,
higher benefits costs and higher delivery costs all compounded to put
the bite on what little profit dollars were available. For many
florists, the formula of lower retail prices and higher costs proved to
be extremely costly to their bottom lines.
Today’s consumers are increasingly price conscious due to their economic
situations and the invasive “Wal-Martization” mindset that has taken
over their psyche. But small businesspeople like florists don’t have the
size or clout to leverage against their suppliers to obtain the lower
costs that larger retailers have.
Yet for florists in survival mode who have little control over their
indirect expenses, lowering prices to increase transactions could have
been a reasonable idea—if they were able either to get consumers to
trade up in price or to develop relationships with those consumers and
generate more frequent, repeat incremental business. The key to success
in this equation is that consumers must recognize the value of what they
purchase, and this didn’t happen consistently enough. More on this
the wire-service factor
Many florists have built their business models on fulfillment of
wire-service orders to the point where some of them get up to 70 percent
of their sales from those orders rather than from customers walking
through their doors. This model served some of them well for many years,
and the wire services were very protective of their florist partners and
consciously made every effort to protect this relationship.
But times and the competitive environment change and force new strategic
directions. Some wire services now compete with their partner florists
by promoting nonfloral items they can fulfill themselves from their own
distribution facilities, keeping 100 percent of the sales and the
profits, and bypassing their retail customers. I’ve heard a lot of
dissension in the florists’ ranks over this, and I’m beginning to see
some pushback on the wire services.
Will it force a change back to the old comfortable relationships?
Probably not, but many florists are looking for every opportunity to
bypass the wire services, much like the wire services have done to them.
a need for florists?
So with all the retail competition that florists face everyday from
supermarkets, convenience stores, warehouse clubs, Internet sites,
street vendors and farmers markets, and with more professional and
deep-pocketed competition at the traditional floral holidays from the
fragrance, candy, jewelry, hotel and spa industries, is there still a
place for retail florists in tomorrow’s marketplace? The answer is,
unequivocally, yes, but it won’t be with the same mindset and approach
that brought florists success in the past.
You might not like the changes that are needed, but if everyone else is
changing, it’s impossible to stand still or go backwards and succeed. In
the last four years, florists’ share of dollar sales has gone from 53
percent in 2002 to 46 percent through the third quarter of 2005, and
their share of purchase occasions has gone from 25 percent to less than
The problem is exacerbated because the total market has been relatively
stagnant, with only minimal increases. As a category, we’re just trading
customers and dollars amongst ourselves, and that’s not a fun place to
opportunities for growth
In my opinion, there are three key areas where traditional retail
florists can focus that can make a positive difference in their ability
to grow and prosper: relevancy, value and relationship.
Relevancy. My interpretation of relevancy, as it relates to
florists, is on two levels: product related and customer related. People
genuinely like flowers, but I’ve heard some consumers say that flowers
aren’t as relevant to them today as they were in the past. Despite the
fact that flowers are far more available in so many places today, they
are actually less “top of mind” than ever before.
Think for a minute about how flowers are positioned around Valentine’s
Day. Too often, we’re focused on price points while our competition, say
the hotel industry, is communicating experiences—the mystery and
mystique of an enchanting evening with a significant other, enjoying a
quiet and exciting romantic interlude with warm baths, candlelight and
soft music. What are they really selling? Rooms! But they’re marketing
the experience rather than the product itself, and price is never
mentioned. And I’ll bet they sell out the hotels on Valentine’s Day.
Flowers have a tremendous, almost unmatched, ability to convey emotion
and provide serenity, a sense of well being and beauty. If we really
want to be relevant, we need to start communicating these innate traits
rather than focusing on price. By identifying with the benefits that
flowers provide, we have a far better chance of making flowers a part of
people’s everyday lives and lifestyles—in addition to special occasions.
A group of visionary florists from the Connecticut Florists’ Association
came up with a phrase that truly describes the relationship florists
should, and can, have with their communities. They see themselves as the
“heart and soul of their communities,” and I see this as an excellent
opportunity to create relevancy and build their customer franchise.
These florists attach themselves to all the key community events, like
proms, homecomings, historical celebrations and civic organization
events. They’re involved in fund-raisers and charity events. (Yes, such
events need to be controlled, or they can get totally out of hand.) They
also make themselves available for school classroom training, such as
science projects. They’re involved with activities with their 4-H clubs
and Girl Scouts troops. They sponsor open houses and tea socials to
engage their customers. And they volunteer their shop spaces as meeting
rooms for organizations.
By becoming relevant to their communities (and those communities are
made up of consumers), these florists are marketing not only flowers but
also their shops as integral parts of the fabric of their communities.
Value. Most people equate value with low prices, but in my mind,
price can be positioned to be just a small part of consumers’ value
proposition. I view value as an equation: Comparative value = perceived
price + quality + assortment + service + ambience + shopping experience
+ presentation + + +.
I purposely use the term “comparative value” because consumers
continually and continuously compare the relative value of one possible
purchase to another before they make any buying decisions. Whatever
offers them the most compelling comparative value gets the purchase nod.
When I shop a local high-end (and very successful) independent garden
center, I know I’ll pay top price. But price, though a factor in my
buying decision, isn’t the value creator that drives my purchase
decision; rather, it’s the incredible service and expertise I receive
and the confidence I gain from buying there.
There also are times when I purchase from my local big-box retailer, and
price value is high in my decision criteria. Though both retailers have
to deal with all the elements in the value equation, each chooses to
place a different emphasis on the various elements, creating different
value propositions, and I make my value decisions accordingly. To remain
successful, florists will have to focus on their comparative value
propositions in communicating with their customers.
Relationship. Supermarkets, by their very nature, are self-service
environments that have a transactional focus, meaning that they are
selling more on the merits of price than anything else, one sale at a
time. Florists, on the other hand, have the unique competitive
opportunity to develop experiential relationships with their customers
that can build loyalty and lifetime value benefit.
You shouldn’t focus on the single transactions with your new customers
but rather on how you can become the supplier-of-choice for all of their
floral needs today and for years to come. Use all of the available touch
points to nurture the relationships—your experience, services and
expertise; your product quality; your Web site; your e-mail newsletters;
your follow-up “thank you” phone calls and notes; calling customers by
name when they enter your store; and treating them with the respect they
optimism for tomorrow
There’s definitely a place in tomorrow’s marketplace for retail
florists, and there’s a tremendous opportunity for future success. But
to achieve that success, tomorrow’s retail florists will have to think
and act differently than yesterday’s florists.
You need to start the change process quickly because the trend has been
working against you. And the sooner you start, the sooner you can
reverse the trend.
Stanley (Stan) Pohmer Jr. is CEO of Pohmer Consulting Group,
Minnetonka, Minn., and executive director of the Flower Promotion
www.flowerpossibilities.com. You may reach him at (952) 545-7943 or
by e-mail at
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