WS industry in 2014

[goldfish]

How might the wire-service industry look like 5 years from now? Here's what I think it might look like in 2014.

Teleflora ceased to exist in 2012. They had allowed too many unqualified florists, too many OGs with poor services. Their sales inevitably declined, followed by the exodus or demise of TF members, together initiating a death spiral for Teleflora.

Ms Resnick tried to stop the hemorrhage by offering Pom Wonderful (another brand she manages) to member florists for free. this tactics, however, didn't work because most TF member florists were already addicted to unhealthy drinks at that point.

1-800-flowers was aquired by ProFlowers in 2013. 1800 spent too much money on the companies and technologies that turned out to be completely useless. Their ad campaign using Twitter, one of the greatest fads in 2009-10, initiated their demise. Acquisition in 2013 of a company selling "virtual flowers" was the last nail in their coffin. It turned out that people aren't that impressed with flowers in 2 dimensions.

Mr McCann is now working as a delivery guy for Goldfish's shop in Long Island. His sister is washing the buckets.

Transformation of FTD from a good-old WS company to an order gatherer + direct shipper, is now complete. FTD has spanned off the WS operation in 2011. The span-off was then merged with Flowershop Network, to which all the FTD orders are now being sent.

FTD also runs a small kiosk in each of Wal-Mart’s 10,000 stores world-wide, right next to the womens' underwear section, trying to catch women's eyes when their vanity is being stimulated.

In 2013, FTD also started a kiosk operation in federal and state prisons. Since we have lot of people in there, it was one of the untapped markets. It worked. FTD's bestseller is now "sorry-you-are-here bouquet" to inmates, surpassing the perennial best seller like "Cramping Beauty."

Since swallowing 1800flower in 2011, ProFlowers now control the majority of Internet floral businesses. Direct-shipping model has become the de facto standard of flower commerce over the Internet.

The break-through occurred in 2012 when ProFlowers started a new, patented method to ship pre-assembled flower arrangements, not just bunched stems.

In 2014, consumers now can click to make their own customized bouquet online, just like people in 2009 made their own avatars online. Frozen roses? That problem was solved in 2010. They now use insulated boxes to ship.

 

[RWK]

OK - That was enlightning.......Now, do you think your forecast spells doom and gloom, or sunny days and clear sailing for the retail florist?

Whichever your prediction is......Let's hear why you foresee this happening.


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Remember though " Time is like a many-laned highway, A car in lane B may crash, while a car in lane C travels on"

Dr. Zaius - Planet of the Apes

It so follows that 800TFTD/Pro can change lanes and alter their future.

 

[Rhonda]

ummm.......insulated boxes don't work when delivering to the Great White North in most of November, December, January, February, March and part of April.
Other than that........rock on!

 

[Rock]

So, Goldie are Doug and Preston doing your deliveries ? :>

(in 2014, I mean, of course)

Rock on.............................

 

[goldfish]

OK - That was enlightning.......Now, do you think your forecast spells doom and gloom, or sunny days and clear sailing for the retail florist?

Market share of local florists hit the bottom in 2012 at 30%. Mass marketers (such as supermarkets and FTD kiosks) control 50% and Internet commerce at 20%.

All the weaker florists have quit... um... "retired" by then. Many of them became basement... um... "freelancers" competing against event florists who still dare to pay taxes.

More than half of the local florists is now hobby florists, by which I mean the owner's personal expenses are paid by spousal income.

In fact in 2011, they established a trade association "Society of American Hobbyist Florists" and petitioned for non-profit tax-exempt status. They aren't making profits, so why not?

It didn't work. Obama simply said he needs money to run his GM; most small businesses are hobbies anyway, you got to pay.

Most OG operations are gone though, because WS commerce is now practically non-existent. JB was let go by his sister in 2012 because he was spending way too much time in FC. He is now running a bike repair shop with prestonway. They are doing well.

 

[RWK]

Market share of local florists hit the bottom in 2012 at 30%. Mass marketers (such as supermarkets and FTD kiosks) control 50% and Internet commerce at 20%.

All the weaker florists have quit... um... "retired" by then. Many of them became basement... um... "freelancers" competing against event florists who still dare to pay taxes.

More than half of the local florists is now hobby florists, by which I mean the owner's personal expenses are paid by spousal income.

In fact in 2011, they established a trade association "Society of American Hobbyist Florists" and petitioned for non-profit tax-exempt status. They aren't making profits, so why not?

It didn't work. Obama simply said he needs money to run his GM; most small businesses are hobbies anyway, you got to pay.

Most OG operations are gone though, because WS commerce is now practically non-existent. JB was let go by his sister in 2012 because he was spending way too much time in FC. He is now running a bike repair shop with prestonway. They are doing well.

Now, let's add some real meat on the bone. Is the above doom and gloom or sunny skies and clear sailing ahead for......each shop type below

1) The average Mom and Pop type shop......( This type shop usually has one or more wire services, generally less than 5 on staff including owners, small storefront, services a local area )

2) The floral specialist type shop.....( This type shop specializes in serviceing, handling, providing floral and other accoutrements for events - such as corporate functions, weddings, sympathy planning, generally less than 10-20 persons on staff including owners, services a wide area - includes travel expenses in quotes )

3) The 800TFTD cookie cutter type shop....( This type shop is members of every wire service available, goes after wire service branded arrangements, over 90 percent of incoming and outgoing are wire specific designs, generally less than 10 on staff including owners )

4) The progressive, independent type shop.....( This type pf shop does not follow the norm, offer outstanding design and service, non-wire affliated, services a local area, usually ranked in top ten florists by local polls, pays close attention to the business side, and utilizes current/ and emerging technologies, and employees successful marketing/advertising techniques, generally less than 20 on staff including owners, usually one or more persons on staff hold some type of certification )

5) Any remaining floral shop that does not meet the above criteria

 

[prestonway]

So, Goldie are Doug and Preston doing your deliveries ? :>

(in 2014, I mean, of course)

Rock on.............................

Already doing them now!

Had to go direct ship to your area Rock, and it works like a charm.

It seems that your area can't be found in our International Directory?

:hug:

 

[Dazeal]

Twitter a fad Goldie? I heard that before, I also heard FB and the internet would be a fad too.

Funny you should post this, I just posted a WS beat down competition on the main chat forum. I guess now, thinking about it, it should of been put here on this forum. Anywho.. I'll go delete it.

Tf will probably be the first to go, that is true, but you didn't mention the proflowers factor since PF using TF to fill their same day orders. Tf will be the first to go, but I will say, TF, out of the big three, treated the real florist the best with their business model, but nice guys don't finish first unfortunately.

You left out my business model Goldfish and how they will steal the idea, if they're smart. I just hope I can build it fast enough before those blood suckers take it away.

So if you knew my idea, like a few here do, this I the future of flowers:

The big three will either steal my idea or buy me out. I won't sell for a billion dollars because I have chosen my side (real florists), so that means they will steal the idea.

It really depends an who moves first. FTD will probably move slowest and is my biggest enemy. TF and 1800flowers might partner with me and start gathering orders for real florists, instead of the other way around. But to adopt my biz model would compete against their established, dying biz model, so it will be interesting.

Will I put them out of biz? I used to think so, but they could all use their name brand and gather orders as a last resort, drop ship teddy bears, etc... but I am guessing they will steal the idea first and try to compete...but my biz model is close to free, can they do close to free? They can't.

Oh wait I know who I will put out of business first, if I do, it'll be Proflowers. So I change my answer from TF to PF. Oh and even before the PF, it'll be the OGs, even the honest ones like JB.

So you're thinking what makes you so sure? It's not me who puts in the 2.5 billion $ a year online, it's the consumer. I'm not the one that is right, it's the consumer who drives this force. And the answer is simple. Fix what is broken through the consumer's eyes and you win.
Ask your customer tomorrow what's wrong with the system of ws or ordering online and fix that and you win. 90% of whom I polled in the last 9 years say I win, not the WS...that is unless the WS steals the idea.. and they will if they want to survive. It's a no brainier if you knew the idea. To those who know my idea and say, but florists are that tech and will never buy into it. I only need 1 florist per town and a few in large areas. My prediction is we will see an evolution of florists like you have never seen before. You will see traditional fibrosis go out over night and basement Betty's renting retail spaces. We'll see florists opening kiosks 200 miles from their first florist. A new delivery business might evolve from this.. like FedEx, but local and branded. Locals as well as those 2000 miles away will get what they ordered 100% every time, no more subs, no more middlemen. Consumers say good bye old ways of doubt and hello industry credibilty. This same technology COULD revolutionize wholesalers and farms too.

Ricky to answer your question, where does that leave Real Florists? I will have a solution in 2 years that will disrupt the way flowers are bought forever, giving the florists 100% control and not the corps who control them. I hope I can move as fast as netflix did against blockbuster when the fit hits the shan.

p.s. JB I have thought of a way that the honest OGs can make money off of this. It's the same way FTD could. You create a directory and gather orders for US, we'll give you $1 an order and 50 cents to FTD.

p.p.s. I lay in bed at night often thinking how I can save this industry from the giant corps that strangle them. I sometimes think about the hard working florist who cries not knowing if she is going to make rent. This motivates me, no matter how corny you think it is or if you believe it or not. Power to the real florist and down with corps who chain them!

 

[RWK]

Well, Daz - Out of the above outline shop models - Which one most closely fits you?

 

[goldfish]

Now, let's add some real meat on the bone. Is the above doom and gloom or sunny skies and clear sailing ahead for......each shop type below

1) The average Mom and Pop type shop......( This type shop usually has one or more wire services, generally less than 5 on staff including owners, small storefront, services a local area )

2) The floral specialist type shop.....( This type shop specializes in serviceing, handling, providing floral and other accoutrements for events - such as corporate functions, weddings, sympathy planning, generally less than 10-20 persons on staff including owners, services a wide area - includes travel expenses in quotes )

3) The 800TFTD cookie cutter type shop....( This type shop is members of every wire service available, goes after wire service branded arrangements, over 90 percent of incoming and outgoing are wire specific designs, generally less than 10 on staff including owners )

4) The progressive, independent type shop.....( This type pf shop does not follow the norm, offer outstanding design and service, non-wire affliated, services a local area, usually ranked in top ten florists by local polls, pays close attention to the business side, and utilizes current/ and emerging technologies, and employees successful marketing/advertising techniques, generally less than 20 on staff including owners, usually one or more persons on staff hold some type of certification )

5) Any remaining floral shop that does not meet the above criteria

I have no idea what "type" of shop will be doing well. It will be dependent on where the shop is located and local demographics.

What is clear to me, however, is that gross profit margin will be thinner in 2014 than it is now. I believe this is inevitable.

One could in theory resist this trend by trying to become a "high-end" (and low volume) shop. I don't think this strategy will succeed in most areas in this country, however.

They will see an increase of bottom line initially but then a gradual decline of revenue. This happens because the influx of new customers will tend to be smaller than the departure of existing customers in "high-end" shops. These types of high-end retailers may compensate this partially by nurturing the customers to spend more or more before they depart. Saks, for example, is good at this. I just don't think it's possible with flowers.

It then follows that, if the margin becomes thinner, a florist must sell more (bigger revenue) to keep the healthy bottom line.

So here's my prediction....

In 2014, a flower shop will need to achieve at least 750K, preferably 1 mil, in annual revenue to stay as a viable business, not a hobby shop.

If your current revenue is about 300K (industry average), you would have to grow 25% annually to reach that goal. As you can see, this is a very tall order for most small florists.

 

[BOSS]

What is clear to me, however, is that gross profit margin will be thinner in 2014 than it is now. I believe this is inevitable.

It then follows that, if the margin becomes thinner, a florist must sell more (bigger revenue) to keep the healthy bottom line.

So here's my prediction....

In 2014, a flower shop will need to achieve at least 750K, preferably 1 mil, in annual revenue to stay as a viable business, not a hobby shop.

If your current revenue is about 300K (industry average), you would have to grow 25% annually to reach that goal. As you can see, this is a very tall order for most small florists.

Possibly so, but much of this depends on current volume level and most importantly the number of shops serving your (or my) shops demographic.

Don't you think, as more shops disappear, that the remaining will grow simply by default somewhat?

In my case, I would only have to average a 7% yearly increase to acheive your theoretical sales volume. That is certainly doable, especially if we lose a shop or two.

 

[Doug Munro]

Interesting train of thought.....

Interesting predictions.

However I personally believe that Teleflora has more staying power. The reality is no one knows for sure what their financial situation is as they do not have to publish their financials as the FTD and 1-800 do.

I have to admit I am not entirely comfortable with Rock's idea that I might be doing deliveries for Goldie.

 

[Mikey the Flower Guy]

I have to admit I am not entirely comfortable with Rock's idea that I might be doing deliveries for Goldie.

or "direct shipping" from Edmonton to Newfoundland.....

 

[BOSS]

I have to admit I am not entirely comfortable with Rock's idea that I might be doing deliveries for Goldie.

Better you than me!

If I have to work for someone, the climate better be better than what I have to deal with now, cuz our weather sucks, has sucked, and continues to suck!

 

[LJVF]

I have no idea what "type" of shop will be doing well. It will be dependent on where the shop is located and local demographics.

What is clear to me, however, is that gross profit margin will be thinner in 2014 than it is now. I believe this is inevitable.

One could in theory resist this trend by trying to become a "high-end" (and low volume) shop. I don't think this strategy will succeed in most areas in this country, however.

They will see an increase of bottom line initially but then a gradual decline of revenue. This happens because the influx of new customers will tend to be smaller than the departure of existing customers in "high-end" shops. These types of high-end retailers may compensate this partially by nurturing the customers to spend more or more before they depart. Saks, for example, is good at this. I just don't think it's possible with flowers.

It then follows that, if the margin becomes thinner, a florist must sell more (bigger revenue) to keep the healthy bottom line.

So here's my prediction....

In 2014, a flower shop will need to achieve at least 750K, preferably 1 mil, in annual revenue to stay as a viable business, not a hobby shop.

If your current revenue is about 300K (industry average), you would have to grow 25% annually to reach that goal. As you can see, this is a very tall order for most small florists.

For shops in mid to high populated areas, I believe that florists that operate in commercial areas will have the best chance for success. These operations will target the event side of the floral industry, such as weddings, parties and funerals. They will also offer wholesale prices to the public where customers can choose from a wide variety of fresh flowers and purchase by the bunch. For everyday designed arrangements, they will rely less on walk ins and more on their internet and phone business via their websites. The lower overhead of operating in a commercial area will allow for better pricing, higher volume and a larger customer base than the traditional flower shop.

 

[Mikey the Flower Guy]

For shops in mid to high populated areas, I believe that florists that operate in commercial areas will have the best chance for success. These operations will target the event side of the floral industry, such as weddings, parties and funerals. They will also offer wholesale prices to the public where customers can choose from a wide variety of fresh flowers and purchase by the bunch. For everyday designed arrangements, they will rely less on walk ins and more on their internet and phone business via their websites. The lower overhead of operating in a commercial area will allow for better pricing, higher volume and a larger customer base than the traditional flower shop.

I actually agree with this "futurization" of our industry, with ONE caveat.....many of us are currently operating with "paid for" business buildings, and even though the day to day perishables such as heat/hydro,etc. will still play a major role, there IS some "wiggle room" when making such predictions that are slanted to the bottom line.
Also, in time, ONLY the TRUE business people that DO operate floral shops, will be successful...hobbyists cannot survive.
Thinning margins are an "indicator" for ALL retail operations....

 

[Flowers& magazine]

Interesting predictions.

However I personally believe that Teleflora has more staying power. The reality is no one knows for sure what their financial situation is as they do not have to publish their financials as the FTD and 1-800 do.

Most definitely. Teleflora is a privately held company that is not subject to market fluctuations of any kind. They're not going anywhere! (except maybe to the bank!)

Oh, and Goldie, I admire your foresight. But pomegranate juice is good for you! Antioxidents and what not... :flowers:

 

[bloomz]

YOu don't think there's always gonna be rich dude's wives who say "Honey buy me a flower shop - I just love flowers"?

I think this is one of the banes of our world - common sense be dammed.

 

[BOSS]

Teleflora is a privately held company that is not subject to market fluctuations of any kind.

They are perhaps, not subject to [stock] market fluctuations, but they are directly affected by fluctuations each of their members face on a daily basis. As more and more mom and pop slob florists are squeezed to make a profit on declining sales their Teleflora membership my become the most invaluable thing they see on their book and they may begin to leave in droves.

The market is changing radically, more so than it has ever before in my 4 decades in this unruly business. We will continue to see a decline in small to medium size shops (the bulk of their membership) and a consolidation into larger to mega florists, with fewer per market. This will be the beginning of the end of todays wire service.

Since Teleflora has much less direct ship, and less direct to consumer sales, they would in theory be the first to become insolvent, based on not having a lot to offset membership losses, and declining revenues.

BWTHDIK, I'm just one of the slobs...

 

[Flowers& magazine]

They are perhaps, not subject to [stock] market fluctuations, but they are directly affected by fluctuations each of their members face on a daily basis. As more and more mom and pop slob florists are squeezed to make a profit on declining sales their Teleflora membership my become the most invaluable thing they see on their book and they may begin to leave in droves.

Of course, Teleflora is nothing without their member florists! That's certainly true!

But I believe their private ownership just puts their staying power on another level.