May 21, 2004

Internet Forces Small Florists to SufferSource: Orlando Sentinel

With the growth of Internet ordering and 1-800 call centers, along with the continued growth of flower-wire services like FTD, Inc., small florists nationwide are struggling to keep local customers, according to a recent article in the Orlando Sentinel.

With the convenience and availability of Internet floral Web sites and call centers, 1-800-flowers.com has become a consumer favorite. It attracted 3.1 million new customers last year and has a 43-percent repeat-order rate. It has increased its sales 14 percent in 2003 to $565 million. Since going public in 1999, the company’s revenue has increased more than 90 percent.

The corporation collects floral and gift orders via the Internet and a network of call centers. It uses a wire service to distribute orders to local florists. However, according to the Orlando Sentinel, a customer who pay $100 for a bouquet might receive a $50 arrangement by the time wire-service fees and delivery charges are subtracted.

According to John Kobylinski, owner of Four Always in Bloom locations in Orlando, Fla., said most mom-and-pop flower shops have been out-marketed by national corporations with larger advertising budgets. “Consumers used to visit independent flower retailers to place orders, even those orders being shipped outside of the area,” he said in the Orlando Sentinel. “Now, they have the Internet or the 1-800 number.”

According to Paul Goodman, editor of Floral Finance, there were about 27,000 retail florists in 1993, with the number dropping to about 25,000 last year. “There are a lot of small florists who aren’t making it,” he said in the Orlando Sentinel. However, Goodman believes the cause of the decline is not the wire services, and he estimates wire orders account for only 16 percent of sales at the average retails florist. “The retail floral industry is in transition. It’s evolving, not dying,” Goodman affirmed.

According to a survey by Floral Management, 50 percent of all florists say wire services will force conventional florists out of business. However, other experts believe there will always be a place in the industry for small independent shops. “Retail florists are always going to have a niche,” said Jennifer Sparks, vice president of marketing for the Society of American Florists in the Orlando Sentinel. “They’re just finding it harder to compete against the larger business with resources to better promote themselves.”