The retail florist, with a keen eye for design, creative flair, and an emphasis on quality, is so far managing to stay one step ahead of the competition. And the industry is showing signs of growth potential.
Lyn Davis, head of brand at flower relay company Interflora, says the florist has a unique role in the retail flower market. “The service that florists offer is special in that it is skilled - and at a florist you can ask for whatever you want,” she says. “Our products are made by local florists and delivered to your door by hand.”
Florists operate in a market that differs from the target market of multiple retailers, according to Andrea Caldecourt at the Flowers & Plants Association (F&PA). “The bespoke service has a high level of design input using unusual or speciality products,” she says. And this market still has the capacity for development, according to Brian Wils-Pope, retail director at the British Florist Association. “Florists must continue to build their own market for their own customers using their own arrangements, and some imagination and creativity,” he says.
The UK retail market for fresh cut flowers and indoor plants is worth £2.2 billion, which amounts to an average spend of £36 per person per year, according to the F&PA. This is more than the UK music industry at £2bn. But European consumers regularly spend £60-100 a year on cut flowers and indoor plants - perhaps an indication of the UK market potential.
Valentine’s Day sees more than 40 million stems of roses sold in the UK, and sales of fresh flowers of all kinds increase by around 50 per cent on that day alone, according to the F&PA. And around five per cent of all flowers sold throughout the year are for mums, with Mother’s Day rating as the top flower-buying occasion in the UK.
The majority of people buy flowers as special gifts, although there is also a place for flowers on the weekly shopping list, says Davis. “An increasing number of people are picking up flowers for themselves, either to brighten their mood or to decorate their home,” she adds. The F&PA says around 60 per cent of the total spend on flowers and plants each year in the UK represents consumers buying for themselves.
The flower business is in the process of changing from being product driven to offering consumer solutions, much the same process as fresh produce has been going through in the last decade, according to Jo Read at the Flower Council of Holland. “The businesses that have been successful are those that have recognised that it is not just about the core products, but how they can be transformed into a solution that satisfies the consumer need. If you’re at the Hong Kong Sevens and realise you’ve forgotten the mother-in-law’s birthday, you need a solution, for instance.” This is one area where the supermarkets are not yet leaders.
The service provided by florists is central to their success, according to Caldecourt. “The self-service flower sections in supermarkets mean that customers are expected to know what they are buying and how to look after the product,” she says. “The florist offers the consumer that little bit more creativity, with personal recommendations and advice.”
The dotcom boom has also had a major impact on the flower industry, according to Read. “Most consumers have access to a computer and as they get used to purchasing online, flowers have obviously become part of that equation,” he says. “A lot of flower shops have websites now, they have to, but the key is to ensure firstly that there is something that directs people to the site and then once they get there, that the range is relevant to them. It is not enough to offer a bouquet with a price tag on, visitors need to be persuaded of the need to buy your products and how they fit in with their lifestyle.”
Davis adds that consumers have moved from using websites to search for and look at products, to readily placing orders and buying online. “This side of the industry will only get bigger,” she says.
But increased competition has posed challenges for florists, who were traditionally the only source of flowers, according to Read. “The sector has many parallels with the fruit and vegetable trade, where generations of families followed each other into the industry. For a long time there was a reasonably comfortable life to be had.
“But all that has changed with the advent of serious competition and the major problem has been that those people that had operated for so long without facing competitive pressures were unable to move as fast as they needed to when it did arise.” It may be harsh, he adds, but “complacency is the first step to bankruptcy”.
The growth of the supermarket flower offer has made its mark in the UK. “There is a grab and go market for flowers, where people see what’s on offer and want to have it, as an impulse buy,” says Colin Hills, managing director at Flowerfete. “And the right price is important.” The supplier, which grows its own products that are packed both in the UK and in Europe, provides 100,000 bouquets a week to the multiples and to the convenience sector, and won the Re:fresh Award for Floral Business of the Year 2006. “Flowers are part of the weekly shop, part of the home, and everyday living,” he adds. “This has seen flowers become more competitively priced.”
Link saves with related products have also helped to boost sales, according to Hills. The thrifty lover can find deals for a bunch of flowers and a box of chocolates for under £10 - and this is a popular side of the market.
But Wils-Pope says selling flowers at such low prices will make them a commodity rather than a treat. The multiple retailers are stocking ‘hand-tied’ arrangements, which are now mass-produced using machines, and selling them for much less than a genuinely hand-tied product, he adds. “Any supermarket in its right mind will see that there is more profit to be had from selling pre-prepared bouquets, rather than trying to move into the work of the florist, which is skilled and very labour intensive,” he says.
Dominic Hughes, joint director of independent florist Pot Pourri in Chiswick, west London, adds that the convenience of the supermarket flower offer has given the consumer unrealistic expectations. “People often come in asking for a hand-tied arrangement, and are shocked that they have to wait 10 or fifteen minutes while it is put together,” he says.
Read blames the over-riding focus on price in the retail market for the slowing growth of the flower industry. “Price has always been a factor in flower purchasing, and particularly so if you are buying flowers for the first time. But quality has always been more important in terms of repeat purchase. Research shows that once someone has bought flowers three or four times, they become a loyal buyer. I would estimate that 10-15 per cent of all consumers are buying flowers as much as 20 times a year, and their biggest influence is certainly not price,” he says.
The capacity constraints, volume requirements and handling limitations at multiple retailers mean they have maintained less stimulating ranges than their florist counterparts, and this too could have a detrimental effect in the medium to long term, according to Read. “It is significant that if you continue to provide the same range of flowers and fail to change it at reasonable intervals, consumers will lose interest, whatever the price,” he says.
Perceived value is important, and UK florists are well placed to win on this score, adds Read. “There needs to be more realisation that impulse is still hugely significant and, for most people, £25 does not fit into their idea of impulse,” he says. “That sits somewhere between £5 and £15, and the key is that the offer is well communicated, in the right place, and practically and realistically priced. We are very good at information, but depressingly poor at communication in this country. I fail to see, for instance, the motivation in putting a huge sign over a supermarket flower section saying simply ‘Flowers’. I would much rather see an enticing message that realises the underpinning factor in every purchase is emotion.
“If a florist gets its messages across in a way that charges customers’ emotions, the chances are that it will create more opportunities to upsell and see those impulse buys more frequently reach the £20 bouquets.”
But the industry is not piling the blame for all of its problems onto the multiples. “There is room for supermarkets and florists to co-exist,” says Caldecourt. The fall out from supermarkets selling cut flowers did not last, she adds. “The supermarkets have introduced flowers to consumers who had never bought flowers before. They have acted as an entry point for customers before they upgrade to shopping at florists.” Both supermarkets and florists know the area in which they can operate best, she says.
Read says supermarkets have created tremendous levels of awareness of flowers and encouraged a higher level of impulse purchasing. “In 10 years, they have very quickly built that into a substantial business and are responsible for between 60 and 65 per cent of flower sales in the UK each year,” he says. “That’s a market which equates to Coca Cola, Bird’s Eye, Walker’s Crisps and Kelloggs - the top four consumer brands - rolled into one.”
But there are problems facing retail florists other than the expansion of the offers of the multiple retailers. The market price for flowers see-saws in response to a volatile supply and demand situation - and this is high on the list of concerns for florists. “Price fluctuations mean that florists find it difficult to make up accurate quotes for orders that are made far in advance, particularly for weddings and other organised events,” says Wils-Pope. And independent florists often have to pay the highest flower prices as they order relatively small quantities.
The growth of flower relay companies, which have both generated sales and taken a share of the market, has received a mixed reaction. Interflora is the world’s largest and most popular flower delivery network - comprising more than 1,750 florists across the UK and 58,000 florists worldwide as part of the Mercury brand. UK florists have been operating under the Interflora brand name since 1953. The network has drawn attention to the flower market with a series of awareness campaigns for special occasions - and the availability of same-day delivery for orders placed before 3pm has helped to widen the market.
“But the relay companies have encouraged consumers to place orders with them directly,” says Wils-Pope. “This means that the florist is missing out on commission, both for orders and delivery.” Interflora member florists, for instance, were long able to rely heavily on telephone orders through the central administration base - often for as much as 60 per cent of their total business, according to Read. But the latest figures show that 50 per cent of all Interflora orders bypass local florists, he adds.
Wils-Pope warns that relay companies are also becoming too prescriptive about the products they want. “They need to keep the profitability of the florist in mind. The majority of florists do not make enough profit to buy product speculatively, and they should be able to make their own arrangements with the products that they have.”
The buying power of the consumer needs to be pointed in the right direction, and there is a need to educate the customer about the benefits of buying from a florist, according to Wils-Pope. “The supermarkets are not going to go away,” adds Read. “They rightly realise that this is a huge category and that penetration figures are still relatively low, at below 40 per cent in all supermarkets. The next question they will be looking to answer is why the remaining customers are not buying flowers. There still remains a big opportunity for the retailers that can get the “for you” message across.”
The Flower Council of Holland has launched a new competition, with Teleflorist, to find and reward the Flower Shop of the Year. “We aim to highlight the characteristics that make florists special and we have more than 300 individual shops entered,” says Read. “We help them all get local press coverage, give them point-of-sale material and try to make them think more deeply about effective self-promotion.”
Other F&PA promotional campaigns to encourage more people to buy cut flowers and indoor plants are in the pipeline, as well as continued support from the British Florist Association.
But retail florists will have to work hard to stay ahead of the multiples, according to Read. “The long-term effect of the market changes will almost inevitably be that we see a vastly reduced number of florist shops in this country,“ says Read. “There is a huge amount of pressure on smaller operators, often exaggerated by local parking restrictions in town centres, and always from rising overheads.” Wils-Pope predicts an increase in independent florists in larger premises at secondary locations off the high street.
But florists still have a unique product offer for which there is a unique demand, insists Read. “There is no other category I can think of which inspires the same emotions in people - other than the small amount of people who suffer allergic reactions to flowers, there are no negatives surrounding the category,” he adds.
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