The floral industry’s single biggest season is right around the corner. Are you ready to make the most of Valentine’s Day, compared with your competitors? A new research report from Produce Marketing Association and Food Marketing Institute can help you strategically compare your mass-market floral retail program against the industry,
The research report paints a clear picture of today’s mass-market retail floral industry, and looks ahead to its plans over the next three to five years. It's based on surveys with businesses that represent nearly 15,000 stores and almost $3 billion in floral product sales, including chains, independents, clubs, other mass marketers, and wholesalers.
Other retail store departments have had business-building information, such as benchmarking data, to guide them for years. In contrast, the last time the mass-market retail floral industry was benchmarked was in 2003 – and there have been significant changes in the industry since then, including significant consolidation. Because the mass-market floral retail industry is highly fragmented, the associations were in the best position to collect this information to help their members to compare how they're performing versus their peers.
Consider the business value of getting more out of your floral program. Let’s suppose that a basic program contributes 2 percent to 3 percent of a store’s overall sales. Floral is a high-margin industry, so boosting sales even a percentage point or two translates into real money.
Looking at the whole-store value, robust floral programs attract customers who have more discretionary funds. While self-service departments spur the occasional impulse purchase, investing in stronger floral departments can attract recurring sales and help build ongoing relationships with higher-income customers who also shop the high-value perimeter of the store.
What Can the New Research Tell You?
The report is chock full of sales statistics against which you can compare your operation. For retailers, that includes average floral sales per store, year-over-year sales growth, average ring and even department square footage. This data is presented by business type so that chains and independents alike can compare apples to apples. And the chain data are also presented by numbers of stores so that small and large chains alike can benchmark against their peers.
The research additionally explores where the sales opportunities are, looking at in-store, online, holiday and other categories. Are you confident that you are investing in the right product mix? The research benchmarks the product offerings that retailers are currently investing in cut flowers, bouquets, arrangements, potted plants, and more. It even gets down into details such as where mass-market retailers are sourcing their floral products.
It's clear from the report that the mass-market retail floral industry is generally moving toward full-service operations. So if you aren’t transitioning to a full-service model, you're losing out on sales and getting left behind your competition.
The report also looks forward to where the industry plans to focus in the future. For example, nearly all businesses that were surveyed reported that they will focus on increasing profitability, and a majority plan to focus on staff training, while fewer than one-third plan to focus on simply buying at lower prices. The research further reveals that many businesses will be investing in expanding their business information capabilities, including category management, using scan data, and bar coding.
The final section of the report explores the opportunities – and threats – that businesses think will affect the mass-market floral industry over the next three to five years. For example, respondents noted that Millennials have very different expectations of floral. Respondents also pointed to the need for qualified store-level talent as a major challenge.