feature story

Ca$hing in on

The latest Christmas data can help you
maximize your sales this coming holiday season.

by Morgan Chilson

The average consumer spent more than $700 last Christmas, with $16.10 being purchases of flowers, according to the National Retail Federation (NRF). But savvy florists should not focus solely on the floral category because consumers also shelled out about $36 for decorations and nearly $407 for gifts. One of the keys to increasing holiday sales can be determining the best way to pull additional dollars in those categories.

Michael Russo, chairman and president of the Gift Association of America (GAA) has spent the past three years visiting retail florists at Christmas. “I like to see what florists are not providing that other retailers are providing,” he explains.
While gift shops and other types of retailers really can’t get into what florists do, such as create customized décor, Mr. Russo says the challenge for florists during the holidays is to focus on uniqueness and quality. “That’s where florists can pick up the ball,” he suggests, “creating upscale, specialized designs.”

The American Floral Industry Association’s (AFIA) “2005 Industry Benchmark Study” reveals that
consumers spent slightly more than $137 on seasonal décor items in 2004 (compared to $87 in 1999), with the bulk of that (88.4 percent) being spent at Christmas. The study also found that consumers today are three times more likely to buy seasonal home décor items for gifts than they were in 1999.
About where shoppers buy those items, the survey shows that seasonal products were purchased at florist shops 12.6 percent of the time in 2004, which is up from 8 percent in 1999; however, crafts stores and mass merchants, like Wal-Mart and Michaels, have experienced the largest surge in seasonal décor sales (up from 37 percent of the market in 1999 to 75 percent in 2004). Specialty retailers and department stores appear to have lost ground in this category.

The Christmas/Hanukkah season accounts for 30 percent of all holiday fresh flower and plant sales, according to the “IPSOS/AFE Consumer Tracking Study, 2004.” Poinsettias made up about 83 percent of all Christmas plant sales last year, with sales topping 66 million plants.
Crystal Springs Florist & Garden Center in Benton Harbor, Mich., grows poinsettias, and they draw people from Chicago, almost 100 miles away. The key with poinsettias, says office manager Judy Weingart, is quality and color selection.
“Florists have to make themselves special and go after consumers who want something different,” she says “Our blooms range from 12 to 14 inches in diameter, and we carry unusual varieties, like marble and salmon.”
James Wanko, executive vice president of the Wholesale Florist & Florist Supplier Association (WF&FSA), agrees that the quality of poinsettias can be important, especially for businesses that send gift plants to their clients. “I’ve received poinsettias that I know came from The Home Depot, and that’s a bad thing,” he says. “Business-to-business gifts really need to be florist poinsettias.”

Mr. Wanko advises florists who want to expand their Christmas business to appeal to the corporate market by offering commercial decorating services. “Corporate business is out there to be had,” he says. “Tailor the decorations to the business, and bring in some of the richness that only florists deliver.”
Brenda Pytash, owner of Westwood Floral & Gifts in Johnston, Pa., says her store caters to many businesses at Christmas. “Restaurants, mall stores—particularly jewelry stores—and convention centers are especially lucrative for us,” she notes.

Fresh Christmas tree sales totaled $521 million in 2003, up $55 million, or 11.8 percent, from 2002. According to the National Christmas Tree Association (NCTA), sales of farm-grown Christmas trees exceeded 2004 projections, and buying real is the “in” thing to do.
When it comes to artificial Christmas trees, it is reported that 9 million households purchased them in 2004, and for florists with limited floor space, Mr. Russo has good news. A survey done about a year ago found that many consumers today want 1.5-, 3- and 4-foot-tall trees for smaller rooms as well as half trees that can hang on walls, he says.
If florists carry artificial trees, here again, they need to upgrade the quality. Consumers can purchase decent trees everywhere, Mr. Russo acknowledges, but when they come to a florist, they expect better. “Florists shouldn’t try to compete with the Wal-Marts of the world,” he says. “They should go upscale a bit, offering something different and of better quality.”

The AFIA’s “2005 Industry Benchmark Study” reveals that more consumers purchase lights and ornaments (see chart on page 89), and demand in those categories has increased tremendously since 1999. The study, however, did not specify from what kinds of retail stores those purchases are made.
As with all holiday merchandise, Mr. Russo encourages florists to carry the best in ornaments—the higher-end collectibles. This decision can vary depending on market, however.
“Ornaments can be a tough sell,” says Ms. Weingart, of Crystal Springs Florist & Garden Center. “Because ornaments can be pricey, you have to know your market and find things that other retailers don’t offer.”

Retail sales of candles in the United States total approximately $2 billion annually, according to the National Candle Association, and about 35 percent of those candles are sold during the December holiday season. In the AFIA’s Benchmark Study, candles ranked third on the list of items purchased for seasonal décor.

In his explorations of retail florists, Mr. Russo says he noticed two years ago that there’s a big market for bows, and they can command high prices. “We shopped for bows at both Wal-Mart and flower shops,” he says. “Wal-Mart had the biggest section, mostly red velvet, but they were as
high as $12 and weren’t as nice as the ones the florists made.”
Mr. Russo suggests that florists could display a wall of bows. To him, the bow story is a perfect example of what florists can do to expand their Christmas market.

Gift-card use has significantly increased, making them almost a must-have for retailers. An American Express survey found that 69 percent of customers wanted to give monetary gifts for the holiday season in 2004, up 44 percent from five years ago. More importantly, 72 percent of customers wanted to receive monetary gifts. For florists, heavily promoted gift certificates can be a good option.

Morgan Chilson, formerly a business reporter and editor in the newspaper industry, is now a freelance writer living in Topeka, Kan.

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