The traditional florist business model was based around the community and the area the florist was located in. This community could be a country town, or suburb within a city. Within this community there was a need for flowers for weddings, funerals, special days and other purposes. This market was relatively constant. People shopped ‘local’.
Four key factors have changed the viability of this model:
1 – Ease of Mobility
People mobility has led to the development of large shopping malls within large cities. This has taken the local shopper out of their local area. Because these malls can deliver high volumes of customers and they are expensive to build and maintain, only retail business with high margins and high volumes are viable.
Mostly, florists have not been able to compete for this space, and the traditional strip shop they were located in has lost traffic to the malls and is also losing viability.
2 – Communities Have Changed
The internet has changed how communities are constructed. People now form communities of interest on line not based on geographical proximity. The internet has also allowed specialised forms of businesses to develop as they can market specific products to a much wider audience at a low cost.
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This has seen the development of floral specialists in weddings, corporates, internet sales with warehouse production, funerals, relay services, etc. These have all taken volume, margin or both from the traditional florist.
3 – Improved Delivery
The internet and e commerce have also created a demand for much more efficient and effective distribution and delivery services to service the ‘direct sales’ model. Over recent years this has evolved to the stage where even difficult to ship perishable products are now able to be widely distributed quickly, without damage and cost effectively.
Flowers are now distributed from any location around the big cities.
4 – Shopping Habits Have Changed
Society has also changed: the majority of adults work so the suburbs have few people in them during the day. The total time required for travel plus work in a day has left little day time during the week for non work activities so people now pay bills, bank and shop on line either at night or during working hours to free up their leisure time. This again has removed people from the daytime shopping environment.
All these factors have made the retail industry fiercely competitive, and the flower industry is no exception. Today, every business needs to specialise and use the new technologies to reach the market that needs this specialisation. Not many ‘general’ businesses are surviving in today’s competitive environment.
Written by Steve White, Tesselaar’s CEO
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