FTD Fire Sale

[BBJ (Big Bad John)]

FTD always eats the discounts. They see longterm value in customers.

Ryan

Maybe, but why send out deep discount emails to existing customers?
Besides the majority of the consumers that shop discounts are not very loyal...some other company offers 5% more and their gone, so the only way to keep them coming back is to continually offer them deep discounted product on which you can't make a reasonable profit if FTD always eats the discount.

On a side note I wonder if this email was also sent to any of the consumers that just bought one of the new Luxury Collection products?

 

[Carolyn]

Did anyone sign up for the FTD Luxury Collection? If so how many did you sell?

 

[Doug Munro]

I agree with you to some extent Doug but don't paint us all with the same broad brush I been doing taboild type advertising at the holidays for 15 years and have now added e mail marketing to that . Many other shops also market and yes I say more then 50 percent do nothing other then a yellow page ad.

But the bigger issue is our not marketing as unified front and force. Instead those of us that do market can not create large waves but rather small ripples.

Steve,

I believe that I used the term "vast majority" and frankly my experience over the years tends to justify the use of the term. I believe that our industry is like most segments of business where a smaller percentage of operators is responsible for the vast majority of sales.

I have heard the figure that 50% of florists do 92% of the business and I have a tendency to believe it.

The individuals (like yourself) that actively work at building their business through marketing tend to always succeed. The others, who place a yellow pages ad (sometimes) and wait in their stores for the phone to ring are usually destined to fail.

Unfortunately on the road to failure they tend to look for scapegoats to point the finger at, amongst these the most common appear to be wire services, wholesalers, and in some case even customers for "their lack of support".

Frankly, from what I have seen over the years if the wire services, order gatherers, and direct shippers stopped advertising there would be little if any flower marketing to the consumer.

The bottom line is that ultimately we are all personally responsible for the success or failure of our own businesses. So I guess my point is that rather than knock the other guy for his ongoing efforts at marketing maybe each of us should look at what we ourselves are doing to promote our business. Lets face it, no one else will do it for you!

 

[steve]

The bigger problem Doug is even for us that are marketing our business well we are merely making ripples on our small ponds while a handful of big operators with big money behind them can create tidal waves with there marketing on every pond in the country. And that is not going to change as long as we all continue to market independently.

 

[Doug Munro]

It appears I jumped into this one

As I stated in my original post I am certainly not a spokesman for the wire services. I am however a member, one by choice.

Yes the wire services do tend to step on members toes on an ongoing basis, something they didn't do 20-30 years ago.

However a lot has changed in 20 years, the biggest change has probably been in communications. A change that is a double edged sword for the WS. Whereas at one time the only practical way to move an order of flowers across the country ( and move the payment) was a WS, that is certainly not the case today.

Today a consumer holding a credit card has no need for a WS (or increasingly for a florist) to send an order across the country. With the proliferation of direct shippers, websites, and cheap long distance the consumer can basically move that flower order themselves. Add to that the introduction of discount flowers into nationally recognized grocery or chain stores.......

So the wire services have adjusted, they have introduced technology, websites, and services over and above just sending orders. As well they are now in most cases (some in the open, some discreetly) competing for orders. Not the way any of us would like to see it , but none the less a fact of life.

Even as I type this posting I suspect that WS membership continues to shrink, so I imagine that in response the WS industry will have no choice but to continue its expansion of "direct to the consumer". They have a business to maintain as well.

 

[CHR]

Back to the Fire Sale emails...

Blogger Email Skunk Hunt today writes about being hammered by 26 emails from FTD.com and its affiliates last week.

How many people tuned FTD out completely after say....the first dozen?

 

[avenuegardensflorist]

Nope not soft a bit, ruthless.

Enabling what? Customers to buy from me - ok, if that's enabling count me in.

Got one back, thank you. :spintongu

and now they get to experience my Standard Setting service - lucky customer.

Why - do you think I should have sent them over to ftd.com?:itchy:

I sure can't stop them from offering up discounts. Hey maybe we should petition?


PS - I still did make money on her.

...one of the problems I envision is this customer now will always
expect the 20% discount. I know I do when I receive a discount from a vendor. But I am glad you served the dude instead of the dOG!

 

[Doug Munro]

Don't they know there is no need for a fire sale or any sales at all!!!!!!!!!!!!
Bunch of morons!

Luc

Luc,

I have to take issue with this statement as quite frankly it is this attitude that is behind our industry losing ground against other gifting sectors.

As I stated earlier why are we one of the few if any retail sectors that feel that there is no need to promote our product during it's peak seasons.

As consumers we expect to see outdoor products go on sale in the spring and summer (we look for the flyers), we wait until fall and winter to do interior renovations as we know the material will be on sale.

Better yet, lets talk turkey. Twice a year at Thanksgiving and Christmas the demand for turkey skyrockets, yet when do grocers put turkeys on sale, twice a year at Thanksgiving and Christmas.

Yet as florists we feel that come Valentine's and Mothers Day we have no reason to consider discounting our product, in fact we generally raise the price as we feel the world is at our door. Yes I know the old argument "we have to raise our prices as ouu COG is up"..... yeah right. Lets not consider that our customer count will go up 4-6 times as well. The concept of volume sales has for the most part alluded the retail floral sector with the exception of the grocery chains and mass marketeers ( another group that are not well thought of by most retail florists).

As an industry we have grown so use to these holidays being cash cows and an opportunity to fill our coffers we have missed the fact that many of our customers are choosing other gifting options.

Unfortunately in today's world we have a lot of gifting competitors at these times, competitors who in fact can ship worldwide and in virtually every instance deliver exactly the product that the consumer offered. Not a substitution that is convenient for the retailer fulfilling the product or one of substandard quality due to "manufacturing" abilities of the store delivering it .

So maybe the time has come that we view these events as opportunities to win back or maintain our customer base by providing good value on our product when it is in demand.

Doing so might also turn some of those "once a year buyers" into more regular customers. Unfortunately the only thing that many consumers know about flowers is that "they are too expensive" an opinion they have formed based on a Valentine's purchase when the prices are through the roof.

On a last note, I do give credit to the FTD's and Proflowers at least they are attempting to offer value to the consumer and have a call to action in their advertising. It may not be well accepted by the average florist but it is good marketing. Maybe we could all learn a lesson form this so called "fire sale".

 

[bloomz]

you're making altogether too much sense Doug.....

 

[BOSS]

On a last note, I do give credit to the FTD's and Proflowers at least they are attempting to offer value to the consumer .

Sure they are, at the expense of the filler fools that continue to fill these orders, all the while sucking the majority of profit out of the industry.

That does not work so well for me...

I too could charge a $14.95 sc and offer 20% off everyday...it's a slippery slope once you start discounting your products, as people become expectant on the discount.

 

[Mikey the Flower Guy]

Nope not soft a bit, ruthless.

Enabling what? Customers to buy from me - ok, if that's enabling count me in.

Got one back, thank you. :spintongu

and now they get to experience my Standard Setting service - lucky customer.

Why - do you think I should have sent them over to ftd.com?:itchy:

I sure can't stop them from offering up discounts. Hey maybe we should petition?


PS - I still did make money on her.

"liar,liar,pants on fire!!" (WS's new hit single)
IF customers come to me, with a competitor's coupon, clipping, advertising special, I GRAB at them, pull them close, and tell them, I CAN DO BETTER!!
We match, beat, and pummel anything to do with wire service or OG "specials", 'cause, we're MORE SPECIALER

 

[Doug Munro]

We are already on a slippery slope

Sure they are, at the expense of the filler fools that continue to fill these orders, all the while sucking the majority of profit out of the industry.

That does not work so well for me...

I too could charge a $14.95 sc and offer 20% off everyday...it's a slippery slope once you start discounting your products, as people become expectant on the discount.

Boss,

In case anyone had not noticed we have been sliding down a slippery slope for some time, Each year the number of retail flower shops in North America dwindles. This is not due to aggressive discounting on their part. Rather, I suspect at least, it is due to the consumer making other choices of where to spend their "gifting dollars". Whether these choices be the purchasing of flowers from the grocery store or buying jewelry online either way the dollars come out of our sales.

While the typical retail florist is busy defending his traditional way of doing business most other retail gift sectors have in fact changed with the times.

Every Christmas the entire retail industry is geared up and prepared to maximize holiday retail sales by discounting product to grab a bigger share of the pie for their business. Yet the retail florist for the most part simply counts on the world coming to their door.

- No special pricing offers
- Little if any advertising ( if there is any, usually no call to action)


Business as usual. Just sit back and wait for the crowd to appear. Pretty much the same at Valentine's Day and Mother's Day. Sure there are lots of reasons given for this like "I already have enough customers at those times" or "why discount your product when it is in demand". Unfortunately both are examples of very short term thinking and I believe that as an industry we are now paying the price.

Boss, I assume you are a consumer? Do you look for the bargains? When you do your Christmas shopping do you watch the flyers?

The worse part of this is that we are dealing with a commodity that in our industry is generally marked up 3 - 5 times on cost providing a gross margin of 66%-80%. Yet the very thought of offering customers a 10% to 20% discount sends shivers down the average florists back.

All I am saying is that if we don't get our act together as an industry we get what we deserve.

 

[dhamil6490]

Luc,

I have to take issue with this statement as quite frankly it is this attitude that is behind our industry losing ground against other gifting sectors.

As I stated earlier why are we one of the few if any retail sectors that feel that there is no need to promote our product during it's peak seasons.

As consumers we expect to see outdoor products go on sale in the spring and summer (we look for the flyers), we wait until fall and winter to do interior renovations as we know the material will be on sale.

Better yet, lets talk turkey. Twice a year at Thanksgiving and Christmas the demand for turkey skyrockets, yet when do grocers put turkeys on sale, twice a year at Thanksgiving and Christmas.

Yet as florists we feel that come Valentine's and Mothers Day we have no reason to consider discounting our product, in fact we generally raise the price as we feel the world is at our door. Yes I know the old argument "we have to raise our prices as ouu COG is up"..... yeah right. Lets not consider that our customer count will go up 4-6 times as well. The concept of volume sales has for the most part alluded the retail floral sector with the exception of the grocery chains and mass marketeers ( another group that are not well thought of by most retail florists).

As an industry we have grown so use to these holidays being cash cows and an opportunity to fill our coffers we have missed the fact that many of our customers are choosing other gifting options.

Unfortunately in today's world we have a lot of gifting competitors at these times, competitors who in fact can ship worldwide and in virtually every instance deliver exactly the product that the consumer offered. Not a substitution that is convenient for the retailer fulfilling the product or one of substandard quality due to "manufacturing" abilities of the store delivering it .

So maybe the time has come that we view these events as opportunities to win back or maintain our customer base by providing good value on our product when it is in demand.

Doing so might also turn some of those "once a year buyers" into more regular customers. Unfortunately the only thing that many consumers know about flowers is that "they are too expensive" an opinion they have formed based on a Valentine's purchase when the prices are through the roof.

On a last note, I do give credit to the FTD's and Proflowers at least they are attempting to offer value to the consumer and have a call to action in their advertising. It may not be well accepted by the average florist but it is good marketing. Maybe we could all learn a lesson form this so called "fire sale".

Doug, having had experience in both the retail grocery and retail floral industries, I have to take exception to your argument. Sale items at holidays in retail groceries, such as turkeys at Thanksgiving, are called lost leaders. They are offered at ridiculously low prices to get the customer in the door with the hopes that they will also buy non-sale items while they are there. That model just doesn't work at a retail flower shop. When a customer comes into my flower shop, they are there to make a single purchase, not fill a grocery cart. If I offer a dozen roses for 20.00, they simply take advantage of the low price and happily walk out the door. They have their need satisfied, and may never return.

So what's the point of offering sale pricing? Do I really want a larger volume of customers around major holidays who are only buying arrangements I'm loosing money on when my cogs and labor are way up?

In response to your last point: "On a last note, I do give credit to the FTD's and Proflowers at least they are attempting to offer value to the consumer and have a call to action in their advertising." Yeah, they're offering value to their customer... AT MY EXPENSE. No thanks!

 

[Mikey the Flower Guy]

Doug, having had experience in both the retail grocery and retail floral industries, I have to take exception to your argument. Sale items at holidays in retail groceries, such as turkeys at Thanksgiving, are called lost leaders. They are offered at ridiculously low prices to get the customer in the door with the hopes that they will also buy non-sale items while they are there. That model just doesn't work at a retail flower shop. When a customer comes into my flower shop, they are there to make a single purchase, not fill a grocery cart. If I offer a dozen roses for 20.00, they simply take advantage of the low price and happily walk out the door. They have their need satisfied, and may never return.

So what's the point of offering sale pricing? Do I really want a larger volume of customers around major holidays who are only buying arrangements I'm loosing money on when my cogs and labor are way up?

In response to your last point: "On a last note, I do give credit to the FTD's and Proflowers at least they are attempting to offer value to the consumer and have a call to action in their advertising." Yeah, they're offering value to their customer... AT MY EXPENSE. No thanks!

I WAS gonna "bash" Doug as well, but, take your florist shoes OFF, put YOUR consumer shoes ON, and keep track how YOU shop...don't point fingers, just follow YOUR OWN instincts...and tell me straight, IF his "argument" DOESN'T pattern itself after YOU!!
DOUG, where your point has it's greatest validity, is that flowers ARE a commodity, and people are STILL gonna buy them, BUT, if they CAN'T get the BEST PRICES, the BEST SERVICE, and the BEST instant gratification from FLORISTS, THEN they do one of two things...they source out OTHER places for flowers, OR, they just buy something else!!
The numbers prove that this is factual data, however, NOT ALL B&M florist shops are losing ground, and the ones STILL STANDING are STILL the ones that were here in the beginning, because they DID INDEED treat their businesses, LIKE businesses, and NOT hobby shops.
Those florists that "screwed" their customers, are soon to be faint memories.

 

[Doug Munro]

Doug, having had experience in both the retail grocery and retail floral industries, I have to take exception to your argument. Sale items at holidays in retail groceries, such as turkeys at Thanksgiving, are called lost leaders. They are offered at ridiculously low prices to get the customer in the door with the hopes that they will also buy non-sale items while they are there. That model just doesn't work at a retail flower shop. When a customer comes into my flower shop, they are there to make a single purchase, not fill a grocery cart. If I offer a dozen roses for 20.00, they simply take advantage of the low price and happily walk out the door. They have their need satisfied, and may never return.

So what's the point of offering sale pricing? Do I really want a larger volume of customers around major holidays who are only buying arrangements I'm loosing money on when my cogs and labor are way up?

In response to your last point: "On a last note, I do give credit to the FTD's and Proflowers at least they are attempting to offer value to the consumer and have a call to action in their advertising." Yeah, they're offering value to their customer... AT MY EXPENSE. No thanks!

Dhamil,

We could debate the merits of discounting and lost leaders til the cows come home. However, I believe that the consumers has spoken on this issue by simply taking their business elsewhere.

I understand the business thinking behind how a grocery store uses lost leaders and the goal of filling a basket.

However that does not mean that a well trained staff in a retail flower shop can not turn a $20.00 original sale into a $40.00 final sale.

Cooler layout, add on sales (vases, balloons, etc). and customer service all will contribute to getting that initial sale increased. Maybe not on every sale, but this is a game of numbers, both customers counts and average sale.

By the way, where do you think all those customers come from at the holidays? In most cases it is not due to aggressive holiday advertising on the part of the shop owner. Generally many of the customers know of a shop because of past purchases.

Part of the goal of building traffic throughout the year is repeat business. Sure you may have to sell a few lost leaders, but some of those same customers are also coming backs for weddings, funerals, birthday, wire orders, etc., none of which are "lost leaders"

 

[sandytf]

Doug, having had experience in both the retail grocery and retail floral industries, I have to take exception to your argument. Sale items at holidays in retail groceries, such as turkeys at Thanksgiving, are called lost leaders. They are offered at ridiculously low prices to get the customer in the door with the hopes that they will also buy non-sale items while they are there. That model just doesn't work at a retail flower shop. When a customer comes into my flower shop, they are there to make a single purchase, not fill a grocery cart. If I offer a dozen roses for 20.00, they simply take advantage of the low price and happily walk out the door. They have their need satisfied, and may never return.

So what's the point of offering sale pricing? Do I really want a larger volume of customers around major holidays who are only buying arrangements I'm loosing money on when my cogs and labor are way up?

In response to your last point: "On a last note, I do give credit to the FTD's and Proflowers at least they are attempting to offer value to the consumer and have a call to action in their advertising." Yeah, they're offering value to their customer... AT MY EXPENSE. No thanks!

It's true that grocery stores do have "loss leaders" during those high volume times, but it isn't true that florists cannot tweak that strategy to work for them. Do you only sell roses? Or Poinsettias? or Easter lilies?
Don't you have more to offer your customers? Isn't it worth getting that customer in your door and THEN sell to them? We spend money all the time on advertising to get customers in the door. If we think they are there for one visit and never coming back we are in poor shape indeed!

If that customer comes in for the $20 roses and sees a reason to come back, he or she will. If they see some fabulous arrangements in the cooler, they may call or come in the next time they need something for a funeral, anniversary, or birthday. Maybe you have candles or other giftware and they may pick one up.

If they come in for the poinsettia during the holidays, you may sell them on a centerpiece, or an ornament, or mistletoe, or a bouquet....... If there is no reason-or you give them no reason-to come back, they won't.

I just don't buy that arguement.

On the flip side, I dont' think discounting is necessarily for everyone. But Doug is correct in that a lot of florists are not aggressively trying to hold on to their customers in any way, shape, or form. I think there is a lot of hand wringing and wire service complaining without action being taken.

(I am not saying this is you-it's just a generalization).

The last thing-in our economy right now-almost everyone is looking for a deal. I know a lot of people who used to spend a lot of money that are now clipping coupons and looking for deals. It's actually sort of chic! It's not so "cool" to pay full price. So, you don't have to give it away, but offering coupons or slight discounts will catch the attention of a lot of shoppers right now.

 

[sandytf]

Oh, well, Doug-I guess you beat me to it!

 

[Doug Munro]

Yor tagline says it all

Sandytf,

"do nothing and soon you will have nothing to do"....

As they used to say "ain't it the truth"

I realize that everyone has different opinions about this issue, but the fact remains that all of the big flower marketeers (grocery, wholesale clubs, OG's, DS, etc.) are aggressively marketing and discounting, that is not up for debate.

So as a group we can simply sit back and continue to allow them to take a larger share of the pie, or we can adjust to the new rules of the game.

I for one have no problem making the adjustment, after all there's not much choice. The choice to follow this path was ultimately made by the end user the consumer, and they rule!

FTD or Proflowers did not set the stage for the changes we face, changing markets and technologies did.

- The introduction of South America as a flower producer played a major role in bringing the cost of flowers down so that the mass marketeers took interest. At $75- 100 for a dozen roses retail there just was not enough volume to get them excited, at $12 -15 a dozen its a different story.

- Credit cards, cheap long distance, and the internet all combined to complete the picture. Prior to the advent of these three and the availability of access for everyone a 1800-Flowers, Proflowers, or FTD.com could not have existed.

So now we all have the choice of changing with the times or falling by the wayside.

Trust me we are not the only industry facing troubling changes, how would you like to own a newspaper, an Am radio station, or one of the big three television networks. All of these are seeing the revenue stream (advertising & circulation) shrinking at a pace they could never have imagined.

 

[goldfish]

The last thing-in our economy right now-almost everyone is looking for a deal. I know a lot of people who used to spend a lot of money that are now clipping coupons and looking for deals.

Right. And get this.... This change of consumer attitude could well be permanent.

I think that florists who depend on a high gross margin% with low sales volume will not be able to sustain their past profitability.

 

[BBJ (Big Bad John)]

Didn't have time to jump back in on this thread...busy this week with Funeral Work.

As I see it there are many different points of view on this discount advertising but the the real problem with it in the floral industry is that brick and mortar flower shops are not retailers but instead are service providers working with a perishable product.

When do you see 50% discounts on produce? Only when there is a glut of local product in season or when it's past it's prime, not at holiday times.

We don't only have to stock this product with a limited life span but we have to process and design it and deliver it. This in most cases can't be done weeks or months ahead as it can when selling toys electronics clothing or other non perishables.

We also don't get subsidized for advertising like say the electronic stores, toy stores and the like that have there ads paid for by the manufacturer or at least partly, plus manufacturers also advertise there products without adding any store name to the ads.

In my opinion FTD and the others should advertise at holiday times and so should all florists, but there is no need to have a fire sale on half the products you sell, it should be limited to a couple of items that are readily available and have a limited amount of labour.

that's it for now got to get back to work, may add more later.