How Florists Can Compete With the Supermarkets

In Business Skills by Seamus3 Comments

In this article we explore a strategy that some Australian florists are using to sell more flowers, win market share back from the big-brand chain stores and nurture new long-term customer relationships. We break this strategy down and have a chat to some florists about the issue.

The Problem

Many florists see competition from supermarkets in a very negative light. They perceive the chain store has all the advantages of lower cost purchasing, lower overheads and much lower margins. It can seem like unfair competition.

However, if you sit back and think about it – florists actually have some very real competitive advantages over the chain stores:

  • Most customers like to buy products from people who know about the product they are buying, florists know their flowers but you won’t get much expertise at the supermarket checkout (and every consumer knows it)
  • Despite rumours to the contrary, chain stores only mark up the cost price of flowers by about 100%, and while they buy in volume, the purchase price advantage they receive is modest as a percent of the price florists pay
  • Having flowers in 24 x 7 air-conditioning, often near doorways in drafty or hot conditions does not help flower longevity. Florists are able (and know how) to handle and store flowers in much better conditions
  • Supermarkets have very limited control over the specific flowers each store sells as the mix of flowers available is fixed by long term agreements, availability and mass production requirements, usually determined at a head-office level.
  • Florists are in a position to exactly match the needs of their own customer base.
  • Depending on location and logistics, chain stores can have long delivery times between flower harvest and in store display. Meanwhile, florists with good buying skills can ensure they have fresh flowers every day.
  • For many people (read most women) receiving flowers as a gift purchased from a chain store is a mixed blessing, they like the gift but the value of the gift is lost to a great extent because of the source. Our focus-group research shows that women will rarely complain about this because they fear they risk receiving no flowers at all – however they still think it!
  • Flowers bought from a florists and packaged as such have much higher perceived (and real) value in the consumer’s mind

Winning Market Share Back from Supermarkets

Despite these significant advantages, florists have lost market share to chain stores for two key reasons:

1.    they have much lower foot traffic so their relative cost of retail space is higher, this drives the perception that mark-ups must be much higher than the chain stores

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2.    and marketing ‘reach’ (ability to communicate with their market) is weaker.

To compete effectively, maximise your advantages over supermarkets and communicate these effectively to your customers:

•    Buy exactly the right mix of flowers and colours for your market
•    Maintain freshness with careful buying and storage
•    Promote long life (guarantee it!)
•    Always give flower preservative and handling advice
•    Treat pricing cut flowers differently to flowers that you add value to with florist skills
•    Maintain similar margins/mark-ups to the chain stores for cut flowers
•    Don’t be stingy! Nothing kills sales quicker than being mean on value, we are all sensitised to this
•    Attractive, low-cost presentation including your florist shop branding for higher perceived value in both the customers and the receiver’s mind

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Real Florists Selling Quality Flowers at (Just Above) Supermarket Prices

So could you realistically sell quality straight bunches with tasteful wrapping at a price that is the same or just above supermarket price? Some florists who are situated near supermarkets already do:

Florists compete with supermarketsDebbie of Poppies Florist & Café in Queensland says, “I sell what I call ‘Market Bunches’ and charge a totally different price to the things we make up. I compete (with the supermarkets) this way.

“Customers call me and say ‘Debbie, can I come in and grab a Market Bunch?’ because they’ve learned that this is what I call them. It’s just a straight bunch with a nice wrapper, sticker and bow and it looks much better than the supermarkets.

“I double the purchase price to about a 100% mark-up whereas normally you triple the price thereabouts.”

Merrilyn from Clare Valley Flowers in South Australia does a similar thing:

“My daisies, chrissies, whether I get them at $4.50 or $7.50 depending on the time of the year, they’re (sold for) $15 – and yes – I make money.

“But everything that is picked up in the shop, I ask ‘is that for home or is that for a gift?’

“If it’s for a gift it gets a piece of pretty paper, a ribbon, a flower card and my label on it – now you’ve turned a $15 bunch into a worthy gift! … And what’s it costing me? 19c all up!”

In all fairness, not everybody was entirely convinced. Jennifer from Flowers by Jennifer in Dubbo, NSW said:

“I’ve always steered away from that because we want people when they come in here not to be thinking about price.

“We’re a boutique flower shop therefore our flower quality and our prices will be a reflection of that.

“We’ll do it (low-price straight bunches) but they’ve got to wait – and that’s the catch.”

But a number of florists that we spoke to who were not doing this already were open to the idea. One owner situated close to a supermarket in a shopping centre said:

“I think it is a good idea.

“You’re still selling your flowers and in today’s economic climate you’re catering to those who don’t have the money anymore.”

Seamus - marketing nerdWritten by Seamus – Tesselaar’s website manager and marketing nerd – with a whole lot of help from Steve White (Tesselaar’s CEO) and various lovely florists!

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Seamus is Tesselaar Flowers' digital marketing manager. He's a creative marketing geek, writer, musician & accidental flower lover. He helps small businesses with websites and web marketing. If you need any help regarding the Tesselaars website you can contact him on seamuse@tesselaars.com

Comments

  1. I do something similar as i have a coles in my complex a woolworths across the road and cafe that sells (cheap flowers) I call mine home flowers (no bling just quality florist fresh prices at refreshing prices)It works a treat mark up is gst x 2.25, nice
    paper and ribbon flower food and care card. I am marketing fridays and saturdays as home flower days. Doing this has actually increased business and the home flower buyers will still buy blinged bouquets and arrangements for occasions. Men will normally buy
    just the blinged bouquets and as we know they spend more.This is giving me more customers especialy women, who are probarbly a little more frugal.

  2. Our store does not benefit from a great deal of passing trade – we rely on our strong phone order and repeat loyal clientele.I try to offer several items at a $15 pricepoint eg mixed mini gerbs or a combination of daffs &jonquils but am becoming perplexed
    at people requesting mixed(supermarket bunches)I made a batch last week and they didn’t sell however they were a powerful selling tool to encourage sales of quality blooms – made to suit.It’s all about educating your clients and engaging in conversation as
    you create their bouquet-i advise my customers whilst they watch about source/local grower(as we are a regional florist, they like the thought that their purchase benefits the local community) – flower care/longevity and I always end my sale by placing my
    store label on the bouquet re-iterating you could not buy flowers like this in a supermarket or servo.Always offering a message card care card & flower food sachet. They always come back to me.

  3. Thanks Leith and Eleni for your insights – I think the common thread is that when you do manage to reel in new customers, the key is to inspire loyalty through superior customer service 🙂

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