Over the last 10 years, the floral industry has experienced a colossal boom overall, with the total market value of the category more than tripling from £404 million in 1995 to £1.3 billion in 2003.
However, the distribution of market share has changed dramatically over that period.
While florists have almost halved their share from 44 per cent to 24 per cent, the supermarkets have increased their share more than three times over, now cornering 60 per cent of the market.
Although the implications of such a shift for florists is impossible to ignore, Kate Kenyon, communications manager of the Flowers and Plants Association, says it is not all bad news as the florists have also benefited from the overall expansion of the category.
“Interestingly, although florists have lost a lot of market share, their actual levels of expenditure have not dropped significantly, nor has the number of florists shops,” says Kenyon. “It appears that much of the supermarkets’ growth has been organic - the more access people have to flowers, the more they buy and the more the market grows. Sustaining and developing this growth will be the next step.”
Essentially the supermarket business has helped expand the flower sector for everyone, although florists may not agree completely (see page 16-17).
Sainsbury’s floral buyer, Claire Levett, agrees that despite increasing success there is still room for expansion within the retail sector. “There is so much opportunity within the floral category when you think that the per capita spend in the UK is one of the lowest in Western Europe, and that penetration is still relatively low - below 30 per cent.
“The potential is still there to double,’ says Levett. “Flowers are the shop window to the entire store. We must continue to ensure the displays are appealing and eye catching - a weekly planned purchase for some customers or perhaps an impulse buy for other customers.”
Levett attributes the success Sainsbury’s has experienced so far to four main factors: reliable high quality, freshness, innovation and range.
She says high quality is maintained by the agreement of formal specifications with suppliers prior to the launch of any floral line and the completion of quality checks at key stages of production and supply.
“We have worked closely with our suppliers to deliver the freshest flowers in the best condition to our stores and this enables us to give customers a guaranteed vase life which is normally longer than that available elsewhere.”
According to the chain’s floral technologist, Paul Harris, Sainsbury’s has developed its own category growth based on strong sourcing policies at farms that have optimal growing conditions in the UK and overseas.
“Sainsbury’s is able to offer a consistent and traceable year round supply and sufficient volumes of high quality flowers using some of the most developed growing techniques possible,” he says.
In order to maximise the shelf-life of the product, the company employs the fastest field-to-store service available and is dedicated to improving all aspects of the supply chain.
The main area being tackled is in-store care and Sainsbury’s is making great efforts to develop this through store training programmes with their floral staff and experienced suppliers,” he adds.
As the winner of the Asda Produce Supplier of the Year Award, Chris Huggett, co-director of Evolution Flowers, is very pleased with the recent category growth experienced by the store. “Asda achieved an impressive 57 per cent growth in its British cut flower and house plant offer last year,” he says.
“By extending ranges, continually improving quality and ensuring prices always remain low, Asda has been able to grow the market for British flowers with its 12 million customers.“
Having observed a recent plateau in the growth of its flower sales to the retail sector, Lingarden’s new chief executive, Malcolm Parkinson, is determined to discover both the reasons for and remedy to such stasis.
As a main supplier to all of the major multiples, Lingarden has a vested interest in understanding the purchasing triggers driving a broad spectrum of consumers.
Parkinson says that since the category is still relatively new, uniformity of marketing has not yet been achieved among retailers and consumers would benefit from a level of consistency.
“Situating flowers at the front of the store, there is a high traffic flow. But if a sea of flowers is the first thing you see as you walk through the door of a supermarket, you are not going to want to spend a lot of time over choosing flowers, even if it’s a planned purchase,” he says.
And apart from price points, there is very little point of sale information persuading them to buy. “We are looking at several levels of research in order to get good category management. There is always scope for development, you only have to look at other categories.”
Parkinson suggests that as with food there might be potential for relating flowers to their country of origins, where marketing ‘flowers of the world’ would be a chance to evoke memories of flowers associated with foreign travel.
Understanding the emotions that influence consumer purchases is key to retailers achieving the profit potential of flowers and plants, he insists.
“At the moment we are not communicating anything like that, we are just packing all flowers together and we are not selling the emotions attached to them.”
While it is customary for multiples to be guided by product prices, Parkinson feels that if their emotional responses were triggered in the right way, consumers would be willing to pay more for something that inspired great joy.
Since the flower business customarily peaks at this time of year, Lingarden is aiming for greater returns. “For Valentine’s Day and Mother’s Day, the flowers really sell themselves on their own, but when you’ve got people actively looking to purchase we need to be looking at ways to get a higher penetration of the market, to get people to buy more than they had actually intended to,” adds Parkinson.
In addition to offering related products with the Valentine’s and Mother’s Day lines, Parkinson is seeking to encourage repeat purchases in order to sustain high sales year-round.
Sainsbury’s has several new initiatives in the pipeline to increase sales in 2005.
Firstly, it has developed what it claims to be the first supermarket “designer” range of flowers to reach stores in time for the peak spring season.
Premium bouquets, designed by one of the industry’s leading designers, Orlando Hamilton, will be available, along with the first Fairtrade red rose, from Kenya, for Valentine’s Day.
Huggett says that his customers are already enjoying flowers throughout the year. “Asda shoppers know that they can trust the supermarket to give them value for money.
“This approach also helps iron out silly peaks in demand which are difficult to manage. Instead, through long-term planning and sharing of information, growers, ourselves and Asda can ensure that we always have the right products on the shelves all year round.”
Parkinson suggests there may be several factors inhibiting general year-round purchase, such as the ease of transporting them with other items.
However, by continuing to ask questions in order to understand what customers really want, he is convinced that suppliers and their retail partners will find the answers needed to drive the category forward.
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