The Future of the Local Florist

One of the things I love about my position at USWeb is that I get exposure to different industries on a daily basis. I have come to believe that the ability to adapt your consulting to any business model is what separates good consultants from great consultants. But there are times when you look at an industry and you see the future coming like a train, and the industry participants laying on the track, usually complaining about the noise of that damn train. Say goodbye to your local florist, because they are laying on those tracks.

One of the projects I am directly involved with at USWeb is Dot Flowers. They are on online floral site, or what the local florist call an “order taker�. I should point out that Dot Flowers is not an ordinary floral site. It is one of the most advanced, bleeding edge sites for ecommerce. The entire site is in Web Standards, XHTML (strict!), has it’s own blog, a CakePHP shopping engine, and a viral (maybe even open source) marketing component. In summary, Dot Flowers is a Web 2.0 site. But as great as Dot Flowers may be, it is not the train bearing down on local florist. Dot Flowers is simply a passenger.

The train ready to collide (I mean run over) the local florist is simply the future. A future made up of the Web, enhanced fulfillment concepts, and big (I mean the biggest) business. To understand this, let me first take a moment to explain how the floral industry really works.

When you place an order for some flowers, how do you do it? Do you use the Web and go through a site like Dot Flowers or 1800Flowers? Do you call a well-known network like FTD or Teleflora? Do you go to your local florist and ask them to take care of the delivery? Or, do you pull up a phone book and manually look for a florist in the area you need your delivery to arrive? Believe it or not, many florists still believe that people do the later of these.

When you place your order through a website like Dot Flowers or 1800flowers, you are not doing anything different than if you were to call one of the major networks directly. FTD and Teleflora simply have pre-constructed recipes that the local florist should know how to create. And the pricing is standardized for the different bouquets†¦or, you would think. Here lays the major issue. Florists don’t like getting these orders. They recognize the fact that these orders make up a large amount of their business, but their margins are much thinner because of the number of middlemen in the order process. You have to pay the network and the original order taker. And with customer acquisition prices for floral customers averaging nearly $20, the order takers on the Web have a real issue when it comes to marketing.

The price difference for florist is a major issue in this industry. When Dot Flowers sends an order to a florist, the customer has already agreed upon a price with Dot Flowers. The floral networks like FTD and Teleflora usually set this price. So, let’s say a simple birthday bouquet that runs $50 according to FTD pricing. Dot Flowers sells the bouquet to the customer at this price, plus $10 for a service (delivery) fee. The amount due to the actual florist is about 60% of the $50, or approximately $30. Dot Flowers receives 20% of the order amount, and FTD receives 20%. Dot Flowers should in theory make $20 from this transaction, which should just about cover the acquisition of the customer. But, you will see that in fact his rarely plays out so simply. These are approximate numbers, but fairly represent a standard floral transaction.

What happens when the florist decides they don’t want to handle the delivery? Chaos ensues. The initiating order center (Dot Flowers) now has to call the florist and find out why they will not deliver the order (usually because of price), and negotiate a settlement. Often this involves letting the florist keep the $10 service fee, which in turn lowers Dot Flowers profit to $10, half of the industry average for acquiring that customer. Where is FTD in all of this? Nowhere. They collect their percentage and don’t concern themselves with the relationship of the order taker and local florist. In my opinion, FTD is one of the most worthless business models in business today. Most order takers are simply left to their own resolutions with local florists. FTD states to the order takers that they will enforce the pricing guidelines, but watching them do so has be likened to a dismissive parent disciplining an unruly child. They simply send a notice telling the florists to behave themselves.

Now lets talk about the other business models in the floral industry, primarily the drop shipped model. Early users of sites like ProFlowers were shocked when their floral arrangement came in a box delivered by FedEx. This was a new way to receive flowers. ProFlowers defended their model (which many feel take the romance out of flower giving) with the idea that their flowers are “direct from the growers�. This is a claim that has been dismissed by just about every floral industry expert. ProFlowers operates distribution centers that help facilitate the delivery of the flowers. That doesn’t mean that the flowers are not fresher, they very often are. But the great thing about the logistics of this model is that it rids itself of the petty element of the local florist. The pricing is standardized and controlled. The delivery is stabilized by using a well known carrier, FedEx. ProFlowers was one of the initiators of this business model, but now just about every florist site on the Web offers this option. When I say, “offer�, I should say “pushes�. Dot Flowers has relationships with growers all over the country, and they far prefer the business done through them. Flowers are delivered on time and with no substitution, at the price point agreed upon.

Oh, one more thing†¦these flowers are cheaper by a large margin. Most times of the year, a dozen roses sent directly through growers is approximately $30. The same dozen roses delivered by a florist are nearly double at $59. Delivery fees are nearly the same at $10.

To what extent is the drop ship model preferred in ecommerce floral sites? Every product on the current FTD page is available through drop shipping. Think about that for a moment. The floral network itself, when it comes to their own website, prefers drop shipping to florist delivery. The florist, in their attempt to squeeze extra margin out of order takers, and leverage the fact that the order taker is over a barrel because they have already agreed on the order with a customer, has broken the primary rule in business†¦keep your end of the deal. Florist don’t like order takers. That’s going to work out well, because everyday more order takers are sending their orders direct to growers for drop shipping.

But, there will always be a market for same day delivery, and you need florist for that†¦right? Wrong. 1800Flowers has their own chain of flower shops, and also distribution centers. Imagine the ability for 1800Flowers to set up a couple main floral centers in major metropolitan areas. When orders come in, semi-skilled floral arrangers work quickly in a warehouse, pulling flowers and arranging them in a vase they way the pictures show on the website. They then load the flowers up in their well-branded, well-refrigerated van and start their delivery process. Once again, no petty florist trying to squeeze an extra nickel out of the deal.

So, florist are being knocked out of a good percentage of flower orders by lower priced, “fresh from growers� drop shipping. And they are losing metropolitan areas to big floral players who set up distribution hubs and fulfill orders themselves. That leaves the suburban and rural communities. Wait! Did someone say rural and suburbs? Then you are speaking of Wal-Mart country. That’s right, the biggest florist in the country is the same company that is also the biggest pet store, biggest auto parts store, biggest toy store, and even the biggest chain of optometrists in the country. Wal-Mart is such a huge player in the floral space that they have an open order to buy every rose in the country during Valentine’s Day (as long as you sell to them at their incredibly low price point, and the quality is acceptable). What Wal-Mart doesn’t do very much of is delivery. Rumor has it that Wal-Mart has been in deep discussions with FTD. As you might guess, few women swoon at the idea of getting Wal-Mart roses, so Wal-Mart is going to need a brand to lean on. If Wal-Mart joins up with FTD, they could intercept a huge amount of orders, process those orders at their local stores, and deliver them same day. If of course Wal-Mart can afford some refrigerated vans.

What does this mean for companies like Dot Flowers? It’s Hard to say. It could be great because now pricing for local same day delivery is stable. Or, it could be bad if Wal-Mart decides to try to put a strangle hold on the market by only allowing orders directly through them. Either way, this spells disaster to florists. And should we feel bad? These florists have had the opportunity to organize themselves and work with the dreaded orders takers. Instead they have tried to stick to a business model that is long gone. No one is going to dig up the phone number to a local florist in a town so that they can call the florist directly.

Obviously this will not kill every local florist. Some talented local flower shops will be able to hang on by serving weddings or other local events where a floral designer is required. But for the most part, the local florists days are numbered. And with good reason. Much like the record companies and other industries that have tried to fight the future, they cannot win. The evolution of business demands its sacrifice.


  1. You, my unknown blogger, are an asshole of the highest magnitude! How DARE you blame the local florist for not filling your overpriced OGed order and allowing your to make your undeserved 20% (plus rebate of course) just for having a over-hyped “Web 2.0” site.

    It’s OGs LIKE YOU WHO HAVE and are TRYING to ruin the local floral industry, and now you complain because the disruptive technology of direct ship threatens your little gravy train?? YOU and YOUR KIND, for far too long, have sucked the value from wire order system and put more mom ‘n pops out of business then all the direct shippers combined, but now you expect people to feel sorry for YOU when your little kingdom is threatened??

    Man, enough with your crap…

    – mark

  2. You have a rather low opinion of flowers. Not to mention the tastes of the Average recipient.Typical of Men in high places?

    You also have a marked lack of appreciation for what we lowly creechers of the food chain do.

    To you. Sending, Dehydrated flowers, at best Five days from the field. Absent for the most part of refrigeration in route. Fits the bill.

    The 30 bucks must be up your alley. Seems you forgot the shipping charges. You can be cheap on that too if you want a few more travel days added on.

    No doubt the skill of the recipient covers the technical aspects of the how twos of re-hydrating the product. No doubt your loved ones are as half skilled in rendering that web photo as the Professional half skilled labor the likes of 1-800 flowers employes.

    Forget about the 4-7 days extra we extract from re-refrigerating the product recieves after we process them. What do we know and why bother you with details.

    I always wondered how the companys you refer to can really show those “pre-made” product then only ship the parts. Oh, sorry, forgot about the half skilled labor force. Wish I could find some half skilled labor that could make any of those Items fresh off the Curb.

    I have to wonder if your old enough yet to have the water behind your ears dry out yet? Or if you have been married once or twice. Better yet. Even to have climbed the Ladder enough to be invited to a fancy party. Had you noticed, Wally mart really hasn’t moved into that field. Let alone other Big Box Distributiors. The direct shippers really have a hard time with that one for sure.

    On the other hand. I doubt you even noticed nor cared if there were flowers at any event you attended.

    I agree with you about FTD. what ever slam you gave them. Ftd only let Companys like the one you represent into the system in direct conflict with the intrests of the members and the purpose for which Florists joined. But why boor you with petty details of events that occured while you were to young to notice the positive reactions to our petty ways.

    There was a time where Florists had sales that represented either 100% of the sale or 73% of the sale. But your flabbergasted that we Pesky,Ignorant people are not thankful for a generous 60% of All sales????

    Florists really are developing a taste for refusing work clients like yours generate simply because there is no MONEY IN IT. So why should we work for free? Do you work for free? Try it some time. See if you like it.

    It could be that, in the end, what you say will come true. When it comes time for you to punch out. I’m sure Wally will have something on the rack all set for you. I’m not talking Suits here either.

  3. Mr. Shul…you have a few key point’s completely wrong. “Florists” do NOT reffer to these type’s of sites as “order takers” we reffer to them as “Order Gatherers”, often deceptive, SEO’d to the max sites, that fool the comsumer into thinking they are dealing with a traditional, local, Real Florist.

    I’m glad some of us “talented local flowers shops” will be able to “hang on”… in fact I think many of us will grow and prosper…by the way, I don;t do weddings…nor do I fill “gathered orders”.

    Thanks for the space…

  4. It looks like I rattled a lot of cages with my Future of local florists posting. Mark Enriquez called me “unknown blogger”…and an asshole. Well Mark, the assholes name is Ed Shull. Next time try to look at the name of the blog you’re spewing you’re stupidity on. But just to be fair and answer his comment, the order takers like 1-800-flowers and Dot Flowers are not the enemy. They are providing you sales. And they are an unavoidable part of the Web. And if you’re problem is with the Web (which gauging from your but ugly website, it is), then you have already lost.

    On to Peter Coleman. First, thank you for the long response. I like it when someone actually spends some time on their response. But, you’re an idiot. You asked some questions about me, so I’ll answer those first.   I’m 34, so not much water left behind my ears. I have never been married, not that I understand what that has to do with anything, but I have sent a lot of flowers to girlfriends. And yes, I have been to partys, weddings, funerals, etc… that have flowers. And I mentioned that I believed that’s how most quality local florists will stay in business. And as for the OG sites not deserving money, that’s insane. They are in the business of providing you leads. And FTD and Teleflora are also acting as your PR firm, promoting the floral industry, letting people know that they need to send flowers. You may want to give them a little more credit.

    And I don’t know why you refer to Walmart as Wally, that’s just lame. But they will get into the floral space in a bigger way, and they will kick the crap out of most florist.

    On to the “Boss” who says I have a “few key points completely wrong…but then only corrects one of them. I will believe you if you tell me that florists refer to these sites as “order gatherers” not “order takers”.

    For the record, I’m not saying that florists shouldn’t make money. Only that they should charge the same accross the board so that everyone, especially the consumers, knows what they are paying for. And since I have written this, I have seen the amount of florists order go down a lot. The ProFlowers business model is working. Florsits are much like the Middle East, they will never overcome the problems that plauge them until they start working together in a logical way. Now that oughta get me some comments!

  5. Ed,
    You make solid points. For not being a florist, your knowledge of the order flow is uncanny. The use of generalizations in this commentary are a very large part of the “real florists” plight – “If you’re an OG you’re bad”, “If you’re a ‘real florist’, you’re becoming a fossil”. Many florists are generalizing themselves out of business. What is apparent however is that local florists cannot survive without OGs and OGs cannot survive without florists. Same day delivery orders from consumers are not going anywhere.

  6. Pink,

    Thanks for the great comment. I think you are the first florist to acknowledge that there is a problem that must be addressed. You’re right, most local florist could not survive without the OG’s, and the OG’s obvioulsy need someone to ditribute their orders.

    But with 1-800-flowers creating their own warehouses, and the possibility of a Wal-Mart sized company moving into the florsits space, I question who is more at risk. Both sides of the business would obviously be hurt, but OG’s would survive.

    I would love to see a solution come in to play that leverage the Web to allow OG’s and florist to coexsist without the issues we see today. But isn’t that what FTD is supposed to be? So I guess the real question is, where does FTD fall short, and how can it be fixed?

  7. FTD no longer carries the mission that it used to. Their mission is about increasing shareholder value and trying to be like Proflowers. There are many local florists that are thriving in various different markets from orders through OGs. The market is in transition there are a lot of people fighting to grab many of the same dollars. To the local florist – there’s less $$ to go around. Can you work through it or will you sell or shut down? Can you differentiate yourself enough to keep your customers or will the customers continue to see that you’re not offering anything better than the local supermarket?

    1800 doesn’t want to open warehouses. They would much prefer to have their orders fullfilled through local shops, too. The problem is that 1800 can’t rely on shops in key markets. They’ve got orders with no one with the ability or capacity to fill them.

    Personally, I don’t see WalMart delivering flowers. They’ll do what the supermarkets do. Put stems and arrangements in displays and put rock bottom prices on them, and for the arrangements that need delivery, they’ll either use a local shop (by way of FTD or Teleflora) or partner with 1800 and utilize their warehousing distribution center. Some supermarkets try to do the delivery thing, but they’re in the grocery business, and their not able to successfully fill orders either.

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