August, 2007

Research Perspective and Comments & Analysis

Flower Power, By George!

I am a big believer in the power of fresh flowers. Being married to a woman who loves color and beauty, I’ve made it a practice to bestow flowers on my bride for any or sometimes no reason other than to brighten up our surroundings. In years past, flowers even provided a peace offering to get me out of trouble (luckily infrequently!).

When she worked as a school librarian, I got great pleasure sending Bonnie flowers at school so everyone could enjoy them. The kids loved to see what colorful arrangement would appear next on the library counter. Spouses of her colleagues would tell me I was making their lives tougher by raising the bar of expectations!

I’m democratic about where I buy flowers. When I want a formal arrangement made up and delivered, I order from the local florist for local needs or an 800 or online service for long distance. Hotel concierges love to help arrange surprise greetings. I’ve also picked up an attractive bunch that catches my eye while grocery shopping to simply brighten up our home.

According to Produce Marketing Association’s (PMA) latest consumer research, my buying habits, though likely much more frequent than average, are fairly representative of most floral consumers — and that suggests opportunities for floral marketers at supermarkets and club stores to expand their business.

Our latest telephone survey of 1,000 primary shoppers explored perceptions about floral purchases from traditional florists, supermarkets and other mass retail outlets such as club stores. Opinion Dynamics Corporation conducted the survey in late May.

The consumers we surveyed told us they are just about as likely to buy flowers from a supermarket as from a florist. Thirty-eight percent buy flowers from supermarkets, 34 percent from local florists, 4 percent from online florists and 5 percent from club stores; 7 percent shop a mix of all these venues.

Purchasers of flowers from supermarkets and other retail outlets tend to be frequent as well as impulse buyers. Twenty-two percent of respondents buy flowers from such outlets at least once a month and 36 percent once every three months. Of these frequent purchasers, 29 percent buy their flowers at supermarkets at least once a month.

Of the surveyed consumers who buy flowers at supermarkets or club stores, 61 percent report spur-of-the-moment purchases — they see a beautiful bunch of flowers and buy it on the spot. They are also frequent purchasers; 37 percent make these unplanned purchases once a month or more, and 35 percent about once every three months.

That supermarket and club store flower customers are both frequent and impulse purchasers is good news for mass market retailers and suggests the low-hanging sales fruit lies in expanding those impulse purchases.

However, these retailers also have two very large hurdles in consumer perception to overcome, according to our survey.

First, there is a clear distinction in surveyed consumers’ minds regarding the freshness of flowers from florists versus supermarkets. Forty-five percent stated they are “very satisfied” with the freshness of florists’ flowers, almost double those who reported they are very satisfied with the freshness of flowers they buy from supermarkets (26 percent).

In addition to this perceived freshness gap, our data indicate that when buying flowers for special occasions, consumers also draw a clear distinction between florists and supermarkets or club stores. For the traditional flower-giving occasions — anniversaries, gifts, get well, congratulations and other general occasions — our surveyed consumers prefer to buy flowers from florists for five of eight occasions. Supermarkets and club stores, on the other hand, are the preferred sources for flowers that will be enjoyed at home, at work and on more casual occasions.

There are a number of ways supermarket retailers can address consumers’ perceptions in order to boost their image and encourage more sales. Starting with the basics, in-store and on-pack signage can offer tips to consumers on how to maximize the life span of their impulse-purchase flowers once they get them home — while simultaneously communicating retailers’ commitment to freshness and quality. Bundling flower-food packets with every sale can extend flower life, too.

Borrowing a page from coffee marketers, frequent flower shopper cards could award a free bouquet after a certain number of purchases. Retailers can also examine opportunities to expand their special occasion arrangements business if their business model can support it.

And, of course, associate training is vital to ensure flowers are properly handled before the sale and to enhance customer service. PMA’s floral program staff and council are working to offer research, products and services to help retailers expand floral operations.

How important is the presence of expert floral staff in a supermarket? Well, I used to order wonderful custom arrangements from our local supermarket because of George, the brilliant arranger who managed the floral department. George retired and his replacement lacks flair and personality. Now I get custom arrangements elsewhere. Yes, this is what’s known in research as a “one-rat study” — with me being the “rat” — but the dollars switched are not insignificant and this tale is probably not unique.

This latest survey lays out opportunities to expand retail floral sales. When consumers carry more colorful flowers out of the store more often, it means more green in floral department cash registers — and rosier reports of customer satisfaction like mine because of folks like George.

A Store’s Secret Weapon

Consumer research on floral is a perilous endeavor, and we have to thank the PMA for being brave enough to jump right in and start generating some numbers.

The difficulty is that the word “floral” covers two distinct functional categories and rarely do the twain meet. It takes an attentive ear to be certain consumers are talking about the same thing the researcher is talking about.

By far the largest floral business in America is funerals — roughly half of all flowers sold in America are for funerals. Weddings follow next. Add in christenings, bar mitzvahs, hospital flowers — and few and far between are the mass-market outlets that get much of this “special occasion” business.

So when consumers say they are “just about as likely” to buy flowers from a supermarket as a florist, they actually mean “except for when we are buying flowers for funerals, weddings and other occasions, which is when we spend the bulk of the money we actually spend on flowers.”

Most mass marketers know special occasion flowers are not their game. There are exceptions, particularly in rural areas where a supermarket floral shop may be the only floral shop. In this case, it can behoove executives to invest money in hiring great designers, buying delivery vans and, in general, operating a full florist shop that happens to be inside a supermarket or other mass-market outlet.

The need for highly skilled employees, the liability issue of delivery vans, the possibility of alienating a family because the bridal bouquet wasn’t just right and thus losing the family as food customers — all this adds up to the decision that a full service floral shop, capable of handling a lifetime of floral needs, just isn’t the business of a mass merchandiser.

On the other hand, heavy traffic already streaming through and frequent shoppers needing to replenish perishables make for the perfect opportunity to sell to impulse buyers and those who regularly buy flowers to beautify their homes.

Even here the exigencies of square footage and commitment mean mass marketers will offer consumers a varied face. Sometimes it is only pre-made bouquets, sometimes a display case with bouquets and arrangements, sometimes a design staff keeping things interesting and producing assortments.

There are, of course, plants, balloons and ancillary items, and even a small floral department may get beefed up for Christmas and other key floral holidays.

Floral can be tough to manage, especially if a store is trying to offer a full-service shop. Bryan’s story about George is to the point. Note Bryan didn’t say George’s replacement was incompetent and rude, just lacking in “flair and personality.” How is a chain with a few thousand stores going to consistently have floral designers with pizzazz? How many produce managers have pizzazz? It could be said that the whole raison d’être of mass merchandisers is to enable non-specialists to offer acceptable products.

A retailer sometimes gets lucky and a George comes to work. Mostly, though, floral training is needed not to turn every floral employee into the “Floral Designer of the Month” but to teach care and handling basics. Some tips on boosting floral sales in mass-market stores:

1. Don’t hide the department. It is shocking how many retailers go into floral because they want the impulse sale and then find some out-of-the-way nook for the floral counter. Floral displays must be in the mainstream of the traffic flow. Typically, ethylene issues mean the produce department is not the best place for floral.

2. Cross-merchandise. Wine and flowers. Fine cheeses and flowers. Picking up prepared foods for dinner? Flowers are perfect. The hassled mom buying disposable diapers and baby food — she needs a bouquet as well.

3. Increase your shrink. Flowers hidden behind glass doors may keep better, but you don’t want to keep them — you want to sell them. Impulse purchases — remember Bryan’s 61 percent of spur-of-the-moment purchases — require flowers out and available.

4. Capitalize on late night and weekend hours. Even customers who might prefer to buy at a florist may turn to a mass-market outlet when florists are closed. What an opportunity! Pick up a sale now and, possibly, win a customer for life. Unfortunately, many a floral operation is allowed to “run down” at night, and its appearance can convince the late-night guy he was right to want a florist shop. We have to do better here.

5. It shouldn’t scream supermarket bouquet. It is too easy to identify a “supermarket bouquet” and, as such, it comes across as a last-minute purchase. We need to look at our wraps, hang tags, even where we put price tags to make sure our bouquets look like an improvisation by the buyer.

6. Variety and change make flowers sell. Research shows a display of roses will not sell as many roses as a display of roses and 10 different flowers. Change and variety keep interest up and attract consumers to a beautiful, fragrant display. This is not soup — you can’t offer the same variety every day.

7. Get in sync with the store. Does your store sell lots of organics? If a big chunk of those consumers are concerned with the environmental impact of synthetic chemicals, the justification for buying organically grown flowers is ready made. Add to this the “locally grown” issue and the fact that while most cut flowers sold in America are imported, most organically grown flowers sold are domestic — and you see the market has real potential.

Floral is really a store’s “secret weapon.” While it produces sales and profits, if properly merchandised, it also decorates the store and adds fragrance. That alone makes it a department worth growing and the floral consumer, a customer worth knowing.