FTD's Online orders fall 4%

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Great find, RC.
online orders feel 4%
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I believe that means the number of orders fell 4%. Could possibly indicate the gross dollar volume fell even more in FTD's push to promote lower price points.
Additionally, on December 18, 2005, the Florist Business segment sold substantially all of the assets and certain liabilities of Renaissance Greeting Cards, Inc,
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Interesting timing. Wonder what will be sold to 'help' the next quarter?
The Company plans to continue to repurchase shares under this program and, through December 23, 2005, has repurchased 252,400 shares for approximately $2.7 million.
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So that's what been propping up the stock price - http://finance.yahoo.com/q/bc?s=FTD&t=3m
FTD blamed the decrease on a decision to pull back from search-engine advertising, which has "increased significantly" over the prior year.
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Soenen's right in that the cost of internet marketing has gotten out of control for everyone. Also wonder if TF's 20% off ads were part of FTD's decline.

Folks, we are in for some very interesting times.
 
That is just fine and great by me and I was one who noted that our FTD incoming especially from FTD.COM this holiday was very lacking (a good thing). But the one thing I did notice, that those who in the past utilized .com were calling us direct. Maybe some of the "disclaimer notes" I put on gathered orders worked somewhat. When my fed ex guy comes today I'm going to ask him about Pro-Flowers at Christmas just to find out if he did any in our little area. Call it an "impromptu" poll.
Interesting they sold Renaissance (located here in Maine) Wonder who bought it? Thanks for the info, Randy.
 
Wonder Why?

Thanks Randy for the information. My concern is why are sales down? Mike says it's due to a decrease in search engine spending, but I'm sure that before Christmas the FTD management team must have thought that they didn't need to spend the money.

From the initial reports, sales were soft in most parts of this industry. Could the reason FTD's sales and the sales of this industry were soft is that the public is getting turned off to flowers as a gift to be given? Are all the consumers who have been burned in the past, just plain turned off to flowers? Could this decline in FTD.COM's sales be the beginning of a much larger shift in the consumers spending habits when it comes to flowers?
 
The FedEx Guy's response

to my question "Did you deliver ProFlowers boxes for Christmas here this year" Gee, yeah a few but more of 800 Flowers. Most of which I had to take back with me and re-deliver about 4-5 days afterwards.
Hmm Imagine that. I asked why he didn't just drop them on the porch, step, garage etc and he said "Because they'd freeze". Geez, I guess I gave him the real riot act last winter with a flowerbuyer shipment!!
So he says, they take them back to the depot wait for someone to call and make arrangements to deliver them back. So we're talking days here in this area. To which he also stated "They don't care (800Flowers). They just send another box to say I'm sorry it didn't get there fresh".
So, 800Flowers gets the nod in this area of the woods more than ProFlowers. BUT the scenario is the same, they probably will NOT get them on the first delivery (especially if they work) as Fed Ex is in town from 1:30 P.M to about 4:00 PM.
I know 800Flowers is more about gourmet, plants, etc on their web site for holidays so I'm sure not all of the boxes were flowers, just their drop ship junk but the premise is the same. They must spend bunches of bucks replacing for apologies.
 
sfox said:
Thanks Randy for the information. My concern is why are sales down? Mike says it's due to a decrease in search engine spending, but I'm sure that before Christmas the FTD management team must have thought that they didn't need to spend the money.

From the initial reports, sales were soft in most parts of this industry. Could the reason FTD's sales and the sales of this industry were soft is that the public is getting turned off to flowers as a gift to be given? Are all the consumers who have been burned in the past, just plain turned off to flowers? Could this decline in FTD.COM's sales be the beginning of a much larger shift in the consumers spending habits when it comes to flowers?
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FTD pulled back from its search engine advertising and saw sales fall. This shows the poor residual value Internet pay-per-click advertising has. When the PPC ad disappears so does the sale.

Imagine the predicament FTD is in. They have to continually spend more money on advertising to increase sales. As soon as they pull back, even slightly, their sales begin to fall, and as their sales fall so does their stock value. Their real long term conundrum though is quality, value and repeat customers. They can offer the consumer neither quality nor value because their customer acquisition costs are so high, so they must continue to rely on convenience such as pay-per-clicks in search engines. As their advertising costs rise their value and quality goes down because they ask the florists to increasingly subsidize their efforts through unreasonably high commissions, fees, membership costs etc. As they squeeze the florist for more their quality and value slide even further, forcing even more money being spent on acquiring customers just to maintain their level of sales, and the cycle continues.

In the meantime in between time the customer gets turned off!


RC
 
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RC,

This is the first year in quite a while that FTD did not purchase one of its high-volume order gatherers. They have shown YOY growth up until this last holiday but we don't know how much of that growth could/should have been attributed to the new aquisitions.

I'm wondering if they've found that switching formerly 'independent' brands like Florist.com over to FTD has made customer retention tougher.

FTD's P&L divides revenue recognition into two parts, Consumer Segment (dot com) and Florist Segment. If FTD factored sales by Wal-Mart et al into that consumer segment number released this week, then the decrease is even more serious since Wal-Mart was not selling FTD products during Christmas '04.

SFox,

Your fears could be well founded. Randy goes on to enumerate the essential issues:
Their real long term conundrum though is quality, value and repeat customers.
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Some of us have been long fearful of an overall industry decline as a result of poor quality and value perceived at the 'national' level.

But one quarter does not a trend make. Neither 1800 nor PF have commented in their holiday sales to date so we can't really assess if this is an FTD problem, a 'florist-delivered' problem (where 1800 also declines in YOY flower sales) or a 'flowers-as-a-gift' issue (where all segments including PF were flat or down.)

Whatever the trend, look for Valentine's Day national flower marketing to be costly and viciously contested.

PF's V-Day preview is pretty scary as far as price points go http://www.proflowers.com/Valentines-Day-Favorites-VDF . 30 stems of dendobiums for $49.95, 3 Dz roses and a square glass vase for $79.96. We are all in for a serious fight.

<edited - added clickable link>
 
CHR said:
Whatever the trend, look for Valentine's Day national flower marketing to be costly and viciously contested.

PF's V-Day preview is pretty scary as far as price points go http://www.proflowers.com/Valentines-Day-Favorites-VDF . 30 stems of dendobiums for $49.95, 3 Dz roses and a square glass vase for $79.96. We are all in for a serious fight.
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And thats the truth.... ProF has set the bar in the direct ship arena, actually building a "new model" and made lots of money doing so. Now with their acquisition by Liberty Media I would look for them to become even more agressive...

Liberty while owning QVC, also owns Starz and Encore if I read right,...imagine a VD weekend Romantic Movie Marathon sponsored by ProF, with trailing ordering info across the bottom of the screen....

The ProFlowers folks are smart...very smart, a small dedicated staff, most marketing majors, mostly youngish....I look for ProF to perhaps kick FTD's assets directly one of these days...then who knows what they'll offer...
 
We must also remember that this year, ProFlowers can offer product on the 13th right up until 2:00pm for Tuesday Delivery. Last year with VD on Monday, they could not offer Valentines Day Delivery.
 
The FTD numbers being down comes as no surprise here...what I am far more interested in is what the direct shippers did. THAT's the real threat to us, my FC friends, not the outdated wire model. The wires are in the midst of a slow, painful death that nothing will fix...the offerings are "damaged" with an outdated fee structure and poor quality controls, and are being "routed around" on a daily basis.

The DS model is what we all better start figuring out how to beat.
 
The DS model is what we all better start figuring out how to beat.
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I agree, that is why I started 4 years ago and Epicflowers.com is the result of my hard work.

I disagree with you mark that DS(Direct Shippers) will hurt my business. 4 years ago, I understood this, so I decided to create a florist different than the traditional florist. I'll always be one step in front of the Big Box or DS models.

This is a florist who should be shaking in their boots: A traditional florists that offers the same design/product as their local grocery stores do. Your service might kick butt, but in this day and time, people are jaded by crappy "walMart" type service and are becoming more ok with it as time passes.

Rob preaches B2B, this is another way to stay alive and think Rob is on the mark. PF and 1800flowers survive on corporate account or B2B, not your average Joe. Through B2B and corp accounts they gain creditability with their own clients or employees, so they continue to use PF or 1800flowers. My Epic's model, since I have $0 money and have a holes in my socks, entire success is built on Rob's idea of B2B, the online dating companies. We have in our hands a real possibility of gaining 5 million customers over night. Talk about a recipe for failure!

Now FTD's hidden DS, butterfieldblooms.com survives because of FTD members, which is another story. *ducks* My guess is that when ButterBALLblooms gets brought out into the open and FTD members start to notice it, FTD will offer to their members the ability to DS, through FTD "ButterBall blloms". Just one more way to string their members along. The company in Miami who fills for Epic, also fills for butterfield, this is how I found out about them almost 2 years ago.
 
FTD's stock hit a new low today and closed at $9.55. You can view a historical look at the price since the IPO (nearly a year ago) here. The shares have never traded higher than they did on opening day. ($13.95)

The Yahoo message board has a number of comments from what I presume are mostly florists. This one seems to sum up the prevailing sentiment:
Stock is falling. Florists are leaving. Sales reps are quiting. Missed sales targets. And although their ace-in-the-hole had always been their consumer direct division, even that was down 4% over the important Holiday Season. High debt and low morale at FTD folks.
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CHR said:
The Yahoo message board has a number of comments from what I presume are mostly florists. This one seems to sum up the prevailing sentiment:
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Many are florists, but some too are former employees of FTD and OWS....it's often fun to match wits with them, although I have not done so in a while...
 
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