By Steve White
The flower industry has undergone many changes over the last decade and that change continues to accelerate. In order to protect your flower business, it’s clear you need to stay on top of these industry trends, but what is not so clear are the underlying causes of these changes and how these forces will continue to play out, whether you’re in wholesale flowers or retail.
These macro floral industry trends need to be considered in two ways:
- Changes to end consumer behaviour and overall total flower demand
- Changes in production, distribution and marketing channels
Changes to End Consumer Behaviour and Demand in the Flower Business
These changes in the flower business are driven by demographics, competing products, life style changes, culture, economics, and value perception:
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Trend 1: Demographics
Baby Boomers Buy Less Flowers Than Their Parents Did…
Demographics are a key factor in end-use consumption patterns. Baby Boomers, the largest generation by a wide margin in the West, grew up in a world where mother usually stayed at home and the family was home-centric. Flowers were part of everyday home living.
The Baby Boomers themselves grew up and deviated from this cultural norm, with both parents working. They also became much more mobile and less home-centric and they continue this trend as they age and retire.
… And Their Kids Buy Less Flowers Too…
Meanwhile, the Boomer’s children, the so-called “Echo Boomers”, grew up eating out, watching TV and enjoying even greater mobility. The trend is clear: less time at home, less exposure to flowers as a normal everyday part of life. A factor of this mobility is that a bunch of flowers is inconvenient to carry around, whereas a feel-good smoothie, a latte or a new hair-do for that matter can be easily consumed on the go for a quick pick-me-up.
…Except For Wedding Flowers, Which They Buy More Of
On the upside for those in the flower business, these Echo Boomers, who are the next largest generation, have also had a major positive impact on wedding flower consumption. Unlike their parents who seemed happy with the wedding registry office, they have opted for a much more traditional wedding style with wedding flowers being an important element. This factor and the number of Echo Boomer brides has seen wedding flower use expand over the last 10 years as these late-marrying (average about 30 years old) brides tie the knot. This trend has about 5 years left until the numbers start to decline.
Trend 2: Social Obligations
While “social obligations” might not be the most politically correct name for this trend, flowers for important social dates, especially Valentine’s and Mother’s day, have continued to expand as these gift-giving days have become more entrenched in modern culture.
So while day-to-day usage of flowers has declined, specific event driven flower sales are healthy, resulting in florists depending on events. They depend on huge sales volumes on a handful of specific days and otherwise weddings are the best earner going. Due to these trends, many florists increasingly opt to work from home as wedding florists, the steady work demand and low overheads adding up to a pretty decent business opportunity, creative outlet and lifestyle choice.
Trend 3: Competition
Competitive products are also a key trend affecting the flower business. An important element in flower purchasing is the “feel-good factor” i.e. the actual buyer’s reward for buying the, whether they are for themselves or for a gift.
In the last couple of decades, the retail industry has worked hard to capture this value with ever- improving retail experiences and consumerism. Think of the explosion of juice bars, cafes and restaurants, trendy clothing and personal services like massage or nail salons.
It’s about “feeling good” and flowers have not been able to match these changes as a buying experience and often lose out to quick and readily available products like coffee and chocolates.
Trend 4: Value for Money Perception
Flowers as a high labour product have seen their relative value decline as competing products are able to be mass produced and automated to provide an ever-increasing value for a lower cost. Think mobile phones (I paid $4000 for my first Motorola flip phone) or wide screen TVs (the first colour sets cost $5000-$10000). Flower prices have tended to stay static or slowly increase while competing products get better and cheaper.
Trend 5: Flower Styles
Floristry styles have undergone a large transformation. While I claim no skills as a designer, the clear trend is to simple, straight, uncluttered lines (the Japanese minimalist influence perhaps?) rather than large, densely packed bouquets. Of course this minimal style uses a lot less flowers. (German designer Bjorn Kroner said in an interview with us earlier this year that “If you get the flower in the perfect position, then we can sell the air too!”)
Whether this is a good thing or not depends where you are standing. If you are a florist who can sell a minimalist arrangement that actually uses a very small amount of flowers for the same price as a larger denser arrangement that uses more flowers, you stand to make more profit. If you are a grower or wholesaler, however, this can simply mean lower sales volumes and revenue. This in turn has an impact on production and distribution. For example, a flower going out of fashion or being used in lower volume can lead to a glut in production, thus lowering the price that the growers can get for the product.
Fashion and ethnic tastes affect what flowers are popular, where and when. Packaging can also reduce the amount of flowers (think a single rose in a long plastic box). Again it depends where you sit in the distribution chain as to whether these flower business trends are a good thing or not.
Trend 6: Availability
Often overlooked in observing change is that when ease of purchase declines so do sales. As the influences of economic factors like…
- falling sales
- increasing retail costs
- increasing competition
- and the reduced value for money perception
… are felt, the number, quality and range of flowers and retail purchasing options decreases for the customer – as does the quality of the buying experience. Flowers are relegated to lower value retail sites and the spiral down continues as people are less exposed to flowers.
Changes in Flower Business Production, Distribution and Marketing Channels
Trend 7: Transport
The development of low cost air freight has enabled flowers to be grown in different parts of the world where climate and labour costs can produce flowers at a cost lower than local production for many products.
Plant breeding has also had a significant effect in increasing the shelf life of flowers and their transportability.
These factors have shifted large volumes of the world’s flower production to high altitude equatorial locations in South America and Africa. This has increased the period and reduced the cost during which high quality flowers are available for the consumer but also completely changed distribution patterns and flower business participants.
Trend 8: The Internet
The Internet has been a major driver of change in how both information and physical distribution of goods occurs. Depending on your involvement in the flower business, where you sit in the distribution chain, will, of course, determine your opinion of this as good or bad.
To some extent the internet has reduced some of the negative effects of the trends identified above. Customers do get increased exposure more easily to information, images and buying options online.
The internet has enabled the shortening of the supply chain at every level. Customers can buy from farms, florists can buy from farms, wholesalers can sell retail, event companies can buy from manufacturers. There is now a whole matrix of competing options.
The internet has also brought a world of competitors right to the door of every business. The challenge is how to adapt to this.
Trend 9: New Freight Networks
But there is also another major trend that is often missed. In response to all the new distribution options enabled by the internet, whole new freight networks have evolved to service them. Flowers have been a beneficiary of this process as the ability to ship flowers from producer to end customer is now possible. While painful for the participants in the flower business cut out of the chain, the end result for the consumer is better value and more choice.
Trend 10: The Economy
The economy is often blamed for all the problems we face. However, while there is no doubt the GFC and its aftermath (maybe it’s a GFCC: “global financial continuing crisis”?) has impacted business in every corner of the globe and impacted discretionary spending more than many other items, I think from all the above it is clear that the GFC is more an accelerator of existing trends rather than the actual cause. People still buy when they are moved to do so and of course, Australians have fared better than most, if not all, other countries during this crisis.
Trend 11: Women Love Flowers
This is actually more of an eternal truth than a trend, but it is always worth keeping front of mind.
Flowers have one big upside. In the many thousands of hours I have spent involved with and discussing flowers with people, I have yet to meet a woman that does not love flowers. Flowers are still used to convey meaning and in this context they are unmatchable.
Therefore, our task as an industry is to figure out how to satisfy that need!
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