FTD and SCI Corp-

[CHR]

Doug -

I get your points about competition and service. This is a business decision between FTD and SCI. (BTW, do some of your stores already have contracts with SCI? Their take on this?)

About a month ago, I was looking at the funeral selections from FTD and was surprised at the prices for easel sprays like this one and set pieces like this one. The SRPs seems quite high compared to what we (and I presume most other florists) would charge.

This announcement gave me an ah-ha moment. With two sets of middlemen now taking a cut, I believe these SRPs had to be bumped up. SCI has received large discounts from local florists, so for the company to make a jump to using FTD exclusively, you know they believe they'll net even more.

Will the prices cause consumers to balk? With comparison shopping easily available on the web, IMO the costs for casket pieces, set pieces and easels may well put FTD shops at a disadvantage (if they default to FTD's SRPs.)

SCI owns and operates some of the largest funeral homes and cemeteries in our area (Westminster Memorial Park, Pacific View Mortuary, Rose Hills Mortuary & Cemetary) - and they have their own flower shops - and some have belonged to both TF and FTD. I'll be curious to see if they drop TF - and if they do - to watch for TF's response.

There's a lot of money at stake here.

 

[Tuberose]

How do you know if a FH belongs to SCI? Do they have that Dignity Memorial on their web page? Ours all seem to be locally owned and operated if I'm not mistaken.

 

[Carol Bice]

the reality is that many portions of that service can be purchased or obtained elsewhere at a lower cost by the consumer. However what the funeral home does very well is wrap them all up in a neat and tidy package so that they become a one stop shop for the consumer during their time of grief.


IMHO, a tremendous number of people just want to get it over with and love the onestop shopping. The families that go to the florist either are good loyal customers or they really are about price checking.

The rest don't want the hassle of making several stops to get the flowers, etc and making several payments to different businesses.

Neiman Marcus is good at this type of marketing. The try to fix you up with a complete outfit (shoes, jewelry, etc) so you don't have to look around for co-ordinating items and their initial sale is much higher.

Maybe florists need to think about this approach and how they can sway people to come their onestop shopping.

 

[duanermb]

You don't see a problem with a CONsumer being charged 40% more than the value they are receiving?... Really? Seriously????

Smacks of collusion...

Uh... No. What is value? A perception, not a law or morality. How is it that the retail florist is the only one who defines value?

As florists, we tend to charge 2, 3 even 4 or 5 times more than the grocery stores for the same products. Somehow we are providing value at 500% higher prices. So, your analysis really needs to be re-thought.

You can buy a floor-mat for your new vehicle from the manufacturer for $250, and it comes with the car. But you can get pretty much the same thing from an aftermarket store for around $150, or you can go to the junk shop and get one for $50. How often does the consumer just let the car manufacturer provide the floor mats? 9 times out of 10? Do they feel ripped off? No.

I could probably list another 1000 or so similar analogies where the consumer will pay more for perceived value. Isn't that what we are always talking about here anyway?

Why is it that when someone else makes a profit on flowers, the sky is falling, the world is just plain unfair, and the retail florist is getting the short end of the stick?

The funeral home is providing a value added service, and that's the bottom line.

The consumer will pay, or not pay. And as florists, we are typically no better than anyone else when it comes to gauging for funeral work. Without it, probably 50% of us wouldn't even be in business. So, that argument won't stand either.

And I do think it's a great business move for FTD to do this for themselves, and I am sure it was a great business decision for the funeral home company.

 

[duanermb]

Mark, Quick question

Who decides the "value they are recieving"?

I would suggest that is the job of the purchaser not the seller. Lets take the case of roses, Costco sells two dozen 50 cm for under $20.00, the average florist would be in the $80-120 range.

So tell me, what is the "value" of 2 dozen 50 cm roses? I would suggest that to consumers buying them at Costco the value is under $20.00. That would also suggest that in the eyes of these Costco consumers that the average florist is changing far more than the "value received".

This statement is not intended to start a discussion on all the costs the average florist faces, but simply to point out that when we all live in a glass house we shouldn't be throwing stones.

Sorry, didn't see this one before I typed out mine, but I obviously agree.