There is no doubt that among many other industries, especially in the retail sector, floristry has become a game of struggling to compete under rapidly changing marketplace conditions. It’s not just about purse-strings being tighter; it’s about several fundamental business realities that have changed which are putting the squeeze on the floral industry – especially florists.
In this week’s blog post is a quick look at some issues as we have seen them being discussed in a global floral industry forum. This is not suggesting that these changes in the floral business landscape are good or bad but rather it’s about taking a good look at factors that are affecting the international industry and asking: Are these factors also having an influence on your Australian businesses?
1. Internet-based Model #1: Order Gatherers
Like it or not, by gathering the order and on-selling it to actual florists these website operators are squeezing florists’ margins. How did this happen? Well, according to one industry pundit “The order gatherers … were there (online) when retailers were still trying to figure how to hook up their fax machine.”
OK maybe that’s an exaggeration but it is certainly true that these e-commerce pioneers were quick to use new technologies to exploit the business opportunity of selling flowers online.
2. Internet-based Model #2: Warehouse to Customer Direct
Cutting bricks and mortar florists out altogether these online operators can offer reduced prices by simply using a website as their storefront and constructing and delivering from central warehouses.
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In aged populations such as Japan there are, logically, fewer weddings per capita. Add to this that the fact that less people are actually getting married at all. Australia’s wedding activity level is peaking now but as our population ages we will see less weddings in the coming decades.
4. Artificial Flowers
Artificial flowers have increased in popularity as the (comparative) quality of the products has improved. It is not unusual now to see them on restaurant tables whereas ten or twenty years ago this was more unusual because back then plastic flowers were ghastly. Maybe you think they are still ghastly – but a lot of people probably don’t even notice that they’re fake.
5. Cultural Gifting Changes
You may never have considered other gifts such as wine, pot plants, gift cards, jewellery or chocolates as being direct competition – but they are. It makes sense that if somebody only has a certain budget to spend, they may have to make the choice between flowers or a little knick-knack rather than purchasing both.
Rather than bringing flowers, presenting a bottle of wine when arriving at a dinner party has become the norm (perhaps for selfish reasons?!), and there has even been a new trend into buying gifting “experiences” rather than “things”.
6. Chain stores
We’ve looked into this in detail already but it bears repeating here. Chain stores offer what look to the untrained eye like a half decent bunch of flowers at a low price. What’s really on sale is standardization, reduced quality, and reduced shelf life.
7. Work Internet access
People’s shopping habits have changed. These days it simply makes more sense to people to spend a few minutes online during work hours paying bills and shopping, leaving their lunch hour free to relax. This means less walk-ins for traditional florist shops and more sales for the most successful floral websites.
8. Florist Websites with Non-Existent SEO
SEO is short for “Search Engine Optimisation” and is to websites what “location, location, location” is to a bricks n’ mortar shop. If they can’t find your website online how are you going to sell them any flowers?
9. Unsuccessful Florist E-Commerce Strategies
A website is not just a tool for attracting business to your store, it’s a sales and marketing channel in its own right that needs an entirely different strategy.
Brandon Kirkland: “The (order gatherers) understand this and know how to compete in this area.
“Retail florists need to fight fire with fire and gather orders and send them to their retail shop.
“Here’s a quick test for those of you who think you know how to run an online business…. when it comes to email marketing do you send out a mass email blast, or are hitting niches? For example, all of those people who bought birthday flowers last March, did you send them a birthday special email last March 1st? If you answered yes, nice work; if not, know that the (order gatherers) are.”
10. Failure to tell an Engaging Story
If your product can be filed under “general”, then it has no differentiation which means the only game open to you is to compete on price – which is a race to the bottom that only the big guys can win.
An option for small operators is to niche your offering down and to tell an engaging story to your customers and prospects.
How do you know what story to tell? Find the intersection between expressing who you genuinely are and what a segment of the population wants to hear. For example: your story might be “I only do high-end traditional wedding floral design”. Tell this story and find those who want to re-tell that story to help them re-enforce their own personal story by hiring you.
How do you tell this story? Verbally, in writing, in imagery and in everything your business does. Service and product are the marketing.
11. Lack of Industry Level Messaging
Some have cited a failure on behalf of the floral industry to sell compelling reasons to the public to buy flowers.
Robert Trimbee: “As an industry we have done an almost nonexistent job of selling the image of flowers as something that adds to life and is irreplaceable as a communicator of feelings…. does anyone remember that FTD throughout the 60’s used to promote… “Say it with Flowers.
“We are a fragmented industry that was not able to come together to build a cachet in the mind of our consumers and secondly, as a fragmented industry the quality consumers receive is inconsistent.
“We exploited the advantage that many consumers naturally like flowers, but we failed to reinvest to maintain, let alone expand, that market advantage.”
The Way Forward
There is no going back – the Internet is not going away and people are not going to go back to doing things the way they used to do. People will do more online shopping, not less and the combined forces of new technologies and flower commoditization will increase the squeeze on the traditional florist model.
However – all is not lost! Next week we look at some ideas that can help turn these challenges into opportunities.
Meanwhile – have you found these or any other issues to be affecting your business? Any of them irrelevant? Let us know your thoughts in the comments section below.
Written by Seamus – Tesselaar’s website manager and marketing nerd.
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