FTD's look toward the future

[CHR]

http://biz.yahoo.com/e/050920/ftd10-k.html

For those whose eyes glaze over when reading financial information, I'll highlight a few of the remarks I think most florists would find interesting. Any emphasis is my own.

Key Industry Trends. The Company believes key trends in the floral retail market include the increasing role of floral direct marketers, particularly those marketing floral products over the Internet, which has resulted in increased orders for delivery to be placed through floral direct marketers versus traditional retail florists, the advent of retail consumer companies that deliver unarranged boxed flowers via common courier with no involvement of retail florists and the increased presence of supermarkets and mass merchants, which has reduced the cash and carry floral business for the traditional retail florist.

Business Strategy. The Company... plans to pursue growth in additional specialty gift categories as management believes the Company's direct marketing expertise and brand strength allows the business to attract a wide range of quality specialty gift manufacturers. Additionally, the Company plans to expand the lower-priced floral offerings....The Company is currently pursuing opportunities to expand its presence in a number of channels that have not historically represented a meaningful portion of the Company's revenues, such as the supermarket channel and other mass market channels.

Membership as of June 30, 2005 and 2004 was approximately 19,700 and 20,300 FTD members, respectively.

Partially contributing to the increase in order volume were sales of specialty gifts, which comprised 28.8% of total order volume for the year ended June 30, 2005, compared to 25.4% for the year ended June 30, 2004.

Advertising and selling costs

Florist segment $ 56,319
Consumer segment $29,080
...This increase is primarily due to an increase in volume-based rebates associated with orders sent through the FTD clearinghouse, partially offset by more efficient national advertising.

FTD is telling its shareholders that traditional florists have lost and will continue to lose market share so they're ramping up more direct-ship gifts and partnering with supermarkets and mass marketers. But to keep florists busily happy, they'll offer more low-priced same-day-delivery items to take advantage of the channel while it lasts.

Do I need to ask RC to put this in capital letters?

 

[hcflorist]

Kinda interesting that they're comfortable enough with where they're obviously heading to be that blatant and open about it. Guess they figure (probably correctly) that most of their remaining member florists won't see it or won't know what to make of it if they do see it.

I'd like to see the remaining FTD filling florists wise up and immediately just stop filling ANY FTD orders. Then we'd see just how viable their direction and plan is when it's not being openly and blatantly subsidized by those whom it fully intends to put completely out of business.

 

[Dazeal]

Thanks Cathy. I'm not surprised at all and it's only going to get worse.

Charlie, I'm not surprised that they would print what they did so boldly because they know florists well. I mean heck, you guys here support FTD and know what they are doing and yet still support a company whose practices are shallow, deceitful and demeaning to other florists. What does that make florists who support FTD and know they are doing this?

I'd like to see the remaining FTD filling florists wise up and immediately just stop filling ANY FTD orders.

I agree, maybe you should take your own advise Charles and take down your FTD pics and quit supporting them too: One of many examples on your site: http://www.artscapesfloral.com/site/product.cfm?id=C0BE0454-B896-D440-A514679529A7509F

Same pic and description on FTD's site and a 100 other affilates: http://www.ftd.com/yahoostore1/catalog/product.epl?product_id=D5-3484&external=5964

 

[ROBSWF]

Mercuryman Vs. Buzz the Bee???? Oh no!!!

The picture gets a little less foggy now!! Ok, let’s put some things into perspective. At the same time FTD tells its member florists in order for them to remain competitive, they must raise fees for the mercury network. Then they tell their shareholders they are paying too many monies out in bonuses. Hmmmmmm!

At the same time FTD claims to be promoting more consumer orders for retail florists, they tell their shareholders they are able to effectively combat F2F transactions by Efficient National Advertising, that will promote direct consumer sales of specialty gifts and direct shipped flowers. Hmmmmmmm!

FTD tells it’s shareholders basiclly; Since the silly florists could not play by their rules, they will, support, supply and no doubt fund in one way or another, any SUPER BIG BOX, Supermarket or Mass Market Guru with the necessary means including but not limited to EDUCATION on how they can effectively combat FLORISTS! Hmmmmmm.

ARE WE STUPID???

OK KIDS!!!!

It seems the one and most important thing they are willing to push is SAME DAY value priced items through the traditional channels. What does this spell???

FTD is driving you OUT OF BUSINESS!!!! They want the high margin sales for themselves, but willing to promote the bottom of the barrel through your shops. Hmmmmm seems to me they are effectively killing your brand while strengthening their own. The reliable FTD, can ship high quality flowers direct to consumers doors, or the consumer can choose to have the over priced florist deliver the junk!! Can you say $22.99 roses delivered today from florists, or a nice selection of “Fresh From the Mercury Mans Own Fields” flowers for $44.99. I can see it now, the TV spots, hear it on the radio!! Can you? Imagine this; Mercury Man is in a street battle with Buzz the fat, tired old Bee. Who do you think will win???

COME ON its time to WAKE UP!!! FTD is killing the retail florist industry!!! The one brand built exclusively by florists has turned against those it was formed to better.

I would challenge anyone to a face to face debate on these issues. It’s time for people to JUMP off the FTD ship. NOW!!!! Don’t get me wrong here. It is already too late to stop them. By leaving now you can at the very least minimize your future embarrassment!! After-all, your paying for the bullets that they are shooting at you with. How long before they hit you with that fatal shot, depends on how good you are at finding cover.

Just my opinion. Take it, or leave it!

 

[steve]

I think what CHR has posted is correct and love FTD or hate Them they are changeing their business model to the change in the market place and modern technologies.

Meanwhile we the real florist are still gripeing about the past and the vast majority are not willing to band together to do anything about the future. Going it alone is not an answer.

 

[BOSS]

Like many others....I'm making changes to eliminate ANY exposure to FTD...

I'm simply amazed that not many others are...

In this case, the Pied Piper is playing to a herd of deaf mice...

BWTFDIK...Word has it that the heads of the BIG2 think me to be a "loose canon" and a man without a clue....

 

[steve]

Boss reallly in the end it has little to do with FTD its a change in how people are buying and the use of technologies . Every single person can drop dealing with the order gathers but its not going to stop the direct ship business and the massive marketing done by such groups. We as florist will in the end be on an island by oursleves with no brand awareness. We do need to organize as a group sooner rather then later.

 

[ROBSWF]

We as florist will in the end be on an island by oursleves with no brand awareness. We do need to organize as a group sooner rather then later.

Steve,

I agree, there has been a need for a group to gather for a long time now!! If it only benefits those that choose to meet, it is a step in the right direction. A battle plan for the survival (or at least those that attend) can be easily mapped out. Combining creative minds can only accomplish something positive. Something, anything is better than doing nothing at all. There are so many things to gain by such a co-op. Marketing materials, discussions on better efficencies, buying power and logistical planning to mention a few.

Those that choose to sit, wait, watch and see will continue on a path not formulated by themselves. Those that choose to act, speak, move and shake will at the very least play a role in the direction of their company.

Here we are approaching the Holiday season again. It seems to me that a meeting planned now for early January may make the best sense. Enough is enough!! We have let too many opportunities pass us by. It’s time to S*** or get off the pot!

Rob

 

[hcflorist]

Charlie, I'm not surprised that they would print what they did so boldly because they know florists well. I mean heck, you guys here support FTD and know what they are doing and yet still support a company whose practices are shallow, deceitful and demeaning to other florists. What does that make florists who support FTD and know they are doing this?



I agree, maybe you should take your own advise Charles and take down your FTD pics and quit supporting them too: One of many examples on your site: http://www.artscapesfloral.com/site/product.cfm?id=C0BE0454-B896-D440-A514679529A7509F

Same pic and description on FTD's site and a 100 other affilates: http://www.ftd.com/yahoostore1/catalog/product.epl?product_id=D5-3484&external=5964

Now just what does an FTD pic on my site have to do with my wish that everyone would "stop filling FTD orders"? And what makes you think I'm not following my own advice?

Ah, never mind. I'm not going to waste my time and Flowerchat bandwidth explaining the obvious that's been said over and over to you and your "personal grudge agenda" again. Frankly, being aware of your infantile motives and how you operate, I could care less what you think about anything I do or say.

 

[BOSS]

Boss reallly in the end it has little to do with FTD its a change in how people are buying....stop the direct ship business and the massive marketing done by such groups.

It has everything to do with FTD. They still generate the majority of their income from florist related products. We as LOCAL florists have little hope to stop the direct ship method, just like FTD has little hope to dent Proflowers business. Even if every single florist in North America was to join the fight, it would take even more funding than this would generate to even beging to out market these types. I do not feel trying to stop direct shipping of flowers is going to be of benifit, in fact I think this would be both a waste of time and resources at **this time**.

We as florist will in the end be on an island by oursleves with no brand awareness. We do need to organize as a group sooner rather then later.

Here we agree, but I don;t see being an "island" as a bad thing, in fact done correctly it could become a benifit. Yes we need to organize as a group, an International Group, but to facilitate this it will require cooperation across many lines. Don;t get me wrong, I feel very confident this will occur, and in the sooner rather than later time frame...

Maybe we need to drop our disdain for Martha and convince her to be our spokesperson...we could make her Our Apprentice.....

 

[ROBSWF]

Maybe we need to drop our disdain for Martha and convince her to be our spokesperson...we could make her Our Apprentice.....

I really don't think she would, because like all the other big guys, everything she has is always out on bid for the highest dollar. (Including Ethics) But I do like your line of thinking!!

 

[CHR]

In response to Rob's post, I started typing up a laundry list of 'why's' but it ended up being the same old stuff...

Bottom line - just look at the difference between the amount of marketing dollars spent on the florist vs consumer segments. Therein lies the real tale. How much of that money went to OGs (both florists and non-florists) to pay for yellow page ads and pay-per-clicks to redirect consumers who were looking for local florists?

The rebate-induced comas have clouded all but the short-term thinking of the real florists that know this multi-level marketing approach is hastening the decline of their industry as they know it (exploit or be exploited) and the non-florist OG's could care less since they'll simply be off to the next affiliate program with a high dollar return.

Consumers perceive that they pay more and get less through the traditional channel and it's true, especially if they shop through any well-known affiliate marketer - including 1-800, FTD and TF.

But read the tea leaves. After bloating costs and diminishing the perceived value of their florist-delivered products, FTD is position itself to promote something-instead-of-flowers and move on to mass marketers.

So what's a florist to do?

Looking to an industry built on affiliate marketing, can anyone name the most profitable airline? Amazingly enough, it's the one that refuses to pay commissions to travel affiliates - Southwest. Instead of coughing dollars to agents, they market their own services and reduce prices, thereby gaining a reputation for value and remaining financially healthy amid an industry in financial disarray.

Time for a new model or we can go the way of TWA.

 

[hcflorist]

I really don't think she would, because like all the other big guys, everything she has is always out on bid for the highest dollar. (Including Ethics) But I do like your line of thinking!!

Might be something worth knocking around. We obviously couldn't afford to hire her. But her organization might be open to some sort of "partnership" with florists who meet "Martha" specifications and requirements or something along those lines with absolutely NO pretense at being part of the wire service and order gatherer or direct ship ripoff.

I think it's possible that Martha's company has the bucks and resources to make something like this work and be profitable for both them and their florist partners. If they did it, I'd bet it would be done right . . . unlike the many false starts by so many others that have gone virtually nowhere beyond being WS Wannabees.

 

[CHR]

Here we are approaching the Holiday season again. It seems to me that a meeting planned now for early January may make the best sense. Enough is enough!! We have let too many opportunities pass us by. It’s time to S*** or get off the pot!

You know, Southern California is lovely in January. Our school has a rate of under $60 per night at one of the Anaheim Marriott-division hotels...

 

[steve]

I did not say we could stop the proflowers of the world but rather we need to have a brand we can rally around and market locally as well as nationally.

Even if FTD had not gone in that direction someone else would have.

 

[BOSS]

I did not say we could stop the proflowers of the world but rather we need to have a brand we can rally around and market locally as well as nationally.

Even if FTD had not gone in that direction someone else would have.

Sorry Steve, I did not mean to pick on you, I don;t usually let my personal family issues enter into the forums... I apologize.

I agree Martha most likely is not the best choice...there are others....imagine if RIO had chosen to use BUZZ the BEE as the voice of Real FLorists...they could have built a network to rival the wire services...instead they decided to partner with, and exploit the same things the wire services are doing....direct ship.

This will take an image, untainted in both the florists eyes as well as the consumers....maybe the Gerber Baby is still untainted enuf....

 

[CHR]

Maybe we need to drop our disdain for Martha and convince her to be our spokesperson...we could make her Our Apprentice.....

Martha already has her own flowers to promote.

 

[Dazeal]

Martha already has her own flowers to promote.

Good call Cathy, I was thinking the same thing.

Now just what does an FTD pic on my site have to do with my wish that everyone would "stop filling FTD orders"? And what makes you think I'm not following my own advice?

I have no grudge against you Charlie and I think you are a pretty smart guy. I just don't understand how you can be against FTD, but yet still support them buy helping FTD with their brand. Pick a side man. Are you for FTD or against? If you are for, quit complaining, if against go 100% and not 85%.

Charlie, I have a question for you. Are you a FTD member or just using their pics for their brand name recognition to help put $ in your pocket?

I get frustrated here because I see many florists complain about WS, but yet they send them $1000s a month. Does money justify the compromise ones integrity over ethical choices? (That question wasn't pointed at you Charlie) I'm tired of the lip service from cheerleaders here who are sleeping with the enemy. Those of you who talk bad about WS, while you send them more business should either quit complaining, or take REAL action. Easier said than done for some of you big boys I know.

I hate to be a damper on this thread, but you guys want to rally to make a group florists to join some new and improved network, and I am all behind that, but if we can't even convience the FTD members here, even though THEY know they are getting the shaft, how are you going to convert the other 99% of florists out their who see the mercury rhetoric like... We are on your side, we are suing proflowers. We are looking at tackleing this in the wrong way.

Correct me if I am wrong, because I am a noob when it comes to WS, but what if we formed a small group of 50 florists here, approach a business like FloralSource or another lesser of all evils, and say to them, and I know you are going to laugh, but we say to them, you will give up 30% of your shares and distribute them amongst your florists and the florists you sign up over the next 12 months. Also, in this contract, it says OGs, as defined as: (whatever) and certain decisions that we compromise on can't be made unless there is 75% of the vote. So in basic terms, the florists, once again own part of the business and come to terms that we can all agree on. This 30% would NOT be represented by a board or a president who made the vote, because humans can be bought and sold. When there was a vote, all members did it online. Sure we can elect a speaker, or whatever, but this person(s) have no voting power. What would we get? A network we can mold for a future WS. Why would FS, TF or whoever do it? They make a lot of money and grow. Am I too far out of the box? Again I am naive when it comes to how the WS work on the inside.

PS. Believe me if you want, it's your loss if you don't, but since Mday the complaints on our boxed flowers sent out have been less than 2%. And those 2% were complained about arrival time, which was FedEx's fault. At Mday and Vday it was closer to 20%. The reason for that is logistics. The only time I had a complaint about freshness was on Vday and Mday too. C&C have a solution for this, they box them up in Miami, truck them in a semi to Memphis. So keep fooling yourself about boxed flowers overnight while sales soar. Yeah I know not ALL flowers are designed at the farm, but a lot are. Keep joking yourself though.

 

[steve]

Dazeal

Yes many of us currently fill orders / belong to one of the wire services and for some of us its works. I am one of those but I am also prepared to walk away if we have a program in place for me to migrate to that I am comfortable with. The vast majority of us are going to need to be able to put our foot into a new pond while pulling our foot from an old pond that is simply the facts Dazeal. We do not need to point figers we do not need to condem anyone for how they currently run there business what we need to do is create a new railroad allow people to migrate to it and move on.

Years ago the independent hardware stores all across the country started to lose there ability to compete as chains of hardware stores open and then the home depots and lowes open. But out of that came the true value and ace hardwares which in fact are independently owned. If they can do it why can't we?????

 

[Jerry]

Heck Brandon, you think your frustrated!

Just think of the FWAC on these boards that have to live with knowing all this stuff that is killing this industry. They have to feel helpless in doing anything about it. I have total empathy for all in the know, that are tied by the system.

You, I, and others are in the best position to make a difference for our customers, in this industry. It's called ethics, morals, and 100% satisfaction.

I do appreciate what Boss and the rest are trying to accomplish, BUT I heard it for 4 years now. Walk the walk if your going to talk the talk.