Truths about the florist market we don't want to hear

Since the global financial crisis, we have seen major changes to retail overall. This includes the strengthening of larger players and introduction of now-trusted platforms of online sales.

This is no different for the floristry industry in Australia. Traditional florists are being challenged in a similar way to when fast food chains started popping up and began competing with traditional fast food outlets. Unfortunately the statistics are difficult to pull together, but we have data that allow us to extrapolate what might be happening.

What has happened to the size of the market?

The amount of flowers sold to the consumer throughout Australia has kept pace with inflation and has grown by around 2 to 3 per cent per year.

What are the characteristics of the flower market?

The market does not seem to be expanding or growing. Margins are getting tighter. Flowers are readily available from significantly more outlets. Elements within the supply chain such as growers and wholesalers are unable to predict demand accurately.

How many florists have a shop?

Prior to the GFC around 2008 to 2010, the retail store-front florist was king. The number of store-front florists in Australia was between 4000 and 6000 and this was the preferred method of selling flowers. Nowadays, the number of florists selling flowers may not have decreased but the number of stores has decreased to less than 4000. Many florists post-GFC have closed their shop front and started working from a studio or home.

Who else sells flowers?

Flower sales in Australia are split between:

• the mass market (supermarkets) at roughly 30 per cent
• online flower sales at roughly 30 per cent
• florists at roughly 30 per cent
• other at roughly 10 per cent.

And there is an argument to say that the florists are doing a fair amount of the fulfilment of the online orders.

What are some future issues in selling flowers?

Supermarkets:

The main issue is that the supermarkets seem to be getting better at what they are doing. The offering is better and the flowers last longer. The consumer visits weekly and has the convenience of the flowers being in front of them. Also, there are a number of supermarkets trialing in-store florists as part of their ‘fresh’ offering to their customers. In some countries like the USA and the UK, the supermarkets offer gift, sympathy and wedding flowers. Some of these supermarkets even offer to buy online and pick-up in store.

Online order gatherers and relay groups:

Online order gatherers or relay groups are bypassing the florists and collecting orders directly from the consumers. Many of them do not have shop fronts or are not even part of the florist industry. That is, they may just be savvy internet shops which skim orders and pass them onto the relay groups for fulfilment. These orders are then passed onto the florists at a reduced value for the florists to fulfil. Ultimately, an online order of $100 reaches the consumer as a $70 order, which can’t be good for repeat business. Even wedding and sympathy flowers are being sold by online companies.

Some online companies have also started setting up their own fulfillment bases nationally to bypass the florists and the relay groups. This way they can either sell at lower prices because no commission exists, or add more value to have the consumers returning for more.

Will the relay groups do this in future? Will the orders be fulfilled on farms and directly delivered to the consumers as in other countries? Online does not appeal to all, but it must be appealing to many because the volumes are significant.

Keeping up with change

Consumers have changed significantly in how they buy, and the florists need to keep up with the pace of change. If you have survived the massive upheavals of the marketplace over the past six or seven years, you have understood the tides of change and moved with them.

Many businesses struggle to afford the high shopping centre rent costs and require a point of difference to attract their customers. In this light, a florist is becoming a destination store and business owners should start to think and act this way. To achieve this, florists must convey a better message, show their skills and style, and create a shopping experience second to none.

Building your brand, having an updated website, engaging with your customers on social media and keeping up to date with the trends are some easy steps you can take to ensure you keep growing your customer base.

So, what are you doing to secure your future?

This article was published in the October 2018 issue of Flowers magazine, an award-winning Australian publication focusing on the whole of the flower supply chain from breeders to retailers.

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