Chapter 21 The retail flower shop.
Changes in the traditional levels of distribution create a very competitive marketplace. A flower shop must be an aggressive marketer of its products and services. Though the art of professional floral design is an essential element in the success of a flower shop, it is not the sole key to success. The florist who prospers and grows understands the vital importance of combining quality products, desirable floral design, and professional, value-added customer service with a consistent marketing program.
The major function of a flower shop is to add value to the products sold. This added value encompasses a wide spectrum of professional services including, but not limited to, design, delivery, creativity, and personal attention to customer needs. The more exclusive, unique, and desirable the services provided are, the more value the consumer places on them.
The type of operation a flower shop owner wants to develop and the target market to be reached dictates the style and location of the shop. The process of operating a profitable full-service shop involves unique responsibilities and several distinct functions, including visual merchandising, efficient shop layout, marketing, sales, buying, pricing, wire service, and delivery.
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Types of Flower Shops
Flower shops are set apart by the products and services they provide consumers. There are four broad classifications of flower shops. This categorizing of flower shops does not suggest that one type of flower shop is superior. In the marketplace, there are successful flower operations in all four categories. General classifications include full service, professional flower shops; specialty flower shops; limited-service flower shops; and flower merchandisers.
Full-Service, Professional Flower Shops
Full-service implies that the florist provides everything a customer needs in flowers, services, and flower-related products. "Professional" indicates that a flower shop owner and all employees are thoroughly trained in all aspects of the flower business and competently qualified to serve customers. The majority of floral retail shops found in the United States are full-service flower shops (see Figure 21-2).
A full-service flower shop provides a complete range of flower products. It services all the flower needs of its customers for all occasions, special events, everyday use, and personal enjoyment. The full-service, professional flower shop provides delivery service for its customers as well as outoftown delivery through a wire service. With a broad product line that often includes gifts, cards, potted plants, silk and dried designs, gourmet foods, fruit baskets, balloons, and other floral accessories, the full-service florist attracts customer attention because of the great range of products and services provided.
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Specialty Flower Shops
Targeting a particular need in the marketplace, a specialty flower shop specializes in a profitable aspect of floral design. A specialty shop may focus on a particular floral need, such as everlasting silk and dried designs, wedding flowers, or high-style and party work. Because of the limited products offered, specialty shops are most successful in affluent locations and in close proximity to other businesses targeting the same market in other ways. For example, floral shops specializing in weddings are often located near a catering company, wedding reception hall, bridal salon, or wedding photographer. Or, a florist specializing in high-style and party work may be located in a downtown area adjacent to large, luxurious hotels and convention centers.
Limited-Service Flower Shops
The limited-service flower shop is a business that narrowly defines the range of products and services it provides, compared to a full-service florist servicing all the floral needs of its customers. A limited-service flower shop is designed for customers who purchase flowers or gifts on impulse (see Figure 21-3). These floral shops provide little service, since they are most often limited in space. Often these shops, such as those found in hospitals, hotels, and supermarkets, are operated by large full-service shops. Floral designs are often arranged at a full-service shop and delivered to the small limited-service shop.
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When a florist does not accommodate customers with a complete selection of seasonal flowers plus specialty and exotic flowers, it limits flower choices. The flower department in a supermarket that does not provide delivery restricts its range of services. Some flower shops choose not to do weddings, parties, decorations, and other labor-intensive floral work. This approach to operating a flower shop limits the clientele that a florist attracts and serves. However, limiting the services provided does not restrict the opportunity for success. There is a niche in every marketplace for the specialty or limited-service florist.
Often called stem shops or cash-and-carry shops, these floral operations are generally located in heavy-traffic areas. The flower merchandiser is characterized by the retailer specializing in loose cut flowers sold by the stem or the bunch (see Figure 21-4). This flower retailer generally does not provide delivery or design services and focuses specifically on selling loose flowers with little, if any, value-added service. Most of these operations do not have refrigeration, requiring flowers to be brought in daily.
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Some florists believe that the location of the shop is the most important influence in the success of the business. Others show conclusive evidence that a unique flower shop serving a defined clientele profile with desirable products and services not readily available elsewhere attracts loyal buyers regardless of location. The most important consideration is always the cost of location in relationship to sales that can be developed.
With the growing trend of shoppers buying from their homes instead of going to a retail store, the florist who develops a distinctive image and reputation in the marketplace builds a large, dependable, and loyal customer base. Often the value of location is overrated. If a florist's focus is on design work and developing telephone sales, location has little relative value.
There are a variety of location sites typical for flower shops. Whether the florist is located in a free-standing shop, downtown in the central business district, or on a street corner (see Figure 21-5), the location must fit the particular style or type of shop and service the targeted market.
Free-Standing Flower Shop
A shop in a single unit building is a free-standing business (see Figure 21-6). An old home converted to a flower shop, a flower retailer sharing a single building with another business, and a location designed and built exclusively for the flower shop are all examples of free-standing locations. Freestanding locations usually have a more distinctive physical image, provide convenient parking, and offer the florist many advantages in merchandising products.
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Strip-Center Flower Shop
A strip-center flower shop combines several businesses that adjoin one another and make up a small shopping complex (see Figure 21-7). Most strip-centers adjoin residential areas. Because of its accessibility, parking facilities, and rent structure, the strip-center location is desirable for many flower shops. The typical strip center does not provide the same foot traffic as the well-established shopping mall; however, the difference in facility expenses makes the strip-center location cost effective for many flower shops.
On the surface, the shopping mall appears to be the ideal location for a flower shop because of the foot traffic it should provide. Yet, the failure rate of flower operations in shopping malls is high. Unless a flower shop has unlimited capital, it has difficulty surviving in a new shopping mall because it often takes several years for a florist to develop the required foot traffic. For the florist interested in a mall location, it is often better to negotiate with an established center where foot traffic is consistent and defined.
The rent and additional facility charges are usually highest in a shopping mall. This cost-of-operation disadvantage can create critical financial difficulties for a flower shop. Most florists operating successfully in a mall location carry gifts, cards, plush animals, novelties, and other flower and gift-related products (see Figure 21-8). It is not unusual for their nonflower sales to be higher than flower sales. This type of shopping mall operation requires a higher inventory investment as well as astute inventory turnover management.
Some very successful flower shops are located in office buildings and other types of business complexes. Usually, these shops have a clearly defined client base determined by the immediate tenants. Shops in business complex locations often combine the full-service features needed by business accounts with merchandising loose fresh flowers for personal, office, and home use. The business-complex florist frequently has a valuable advantage of capturing loyal customers who have a very high repeat-purchase pattern.
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Although the general trend in some areas of the country, except in smaller towns, is for flower shops to locate in suburban areas instead of downtown, the downtown flower shop is still a viable business (see Figure 21-9). Generally, florists in downtown locations tend to be long-established businesses with a following of loyal clientele. These floral shops often focus on high-style designs for local hotels and businesses.
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Supermarkets and mass merchandisers with aggressive flower merchandising programs feature floral departments in their operations. Newer supermarkets often have large floral departments prominently positioned to command visibility. Floral departments usually concentrate on merchandising flowers by the stem and in prepackaged assortments to attract impulse buyers. Sometimes they feature complete floral services with fulltime, on-premise designers who create custom designs (see Figure 21-10).
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Product Presentation and Shop Layout
The layout of a flower shop must be convenient and serviceable to customers and enable employees to work efficiently. A typical flower shop has an area for display and sales, a work area for receiving and designing flowers and other merchandise, storage areas for supplies and flowers, an office area, and a convenient area for processing orders and loading them into vehicles for delivery.
A planned foot-traffic pattern is necessary, enabling customers to move easily throughout a floral shop without getting confused or feeling trapped. Ideally, the window display attracts customers into the store, the in-store displays promote sales and add-on sales, and the service areas (the sales counter and consultation area) service customers efficiently.
The ultimate goal of the retail florist is to sell flowers and other merchandise quickly, efficiently, and profitably. Efforts to attract customers to the shop and create interest in the flowers and merchandise are known as visual merchandising. The lighting, setting, color, mood, and other elements of display all contribute to the success of selling products. The way a florist displays its products to attract customers establishes and communicates the visual image of the flower shop. This image is identified as "the merchandising personality" of the business (see Figure 21-11). Through visual communication, this merchandising personality shows customers and potential buyers that the retail store is a desirable place to shop.
The primary purpose of any display is to capture attention and motivate people to buy. To understand visual merchandising, it is first important to realize the purpose and primary goals of the display. An effective visual display will achieve four primary goals:
1. Attract attention
2. Create interest
3. Turn interest into desire
4. Generate sales
First, consumers must be attracted to the floral shop and then to the flowers and other merchandise before sales can take place. Window displays attract initial attention. However, visual merchandising does not stop at the front window. The consumer, once enticed into the shop, must be attracted to the merchandise by the in-store displays. When flowers and other merchandise are displayed in creative and artistic ways, customers become more interested in them. Displays must create a desire to buy.
When flowers and products are displayed in vignettes, they are emphasized and the impact of the display is enhanced. The visual presentation of products sways the buying attitude of customers and prospects. Through visual merchandising, product presentation educates the viewer with new ideas and new uses for the products displayed. Helpful information, such as the name of the flower, the price, and other useful or interesting information, will assist the customer in making a buying decision.
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The purpose of the window display is to communicate visually with people who pass by the shop (see Figure 21-12). In locations where many prospective clients go by in automobiles (versus foot traffic), the window display must be bright and bold, able to communicate a message in a split second. Immediate visual impact is the only appropriate approach in creating a window display in a high automobile-traffic location. The name of the flower shop must be very prominent and easily read. The objective of this type of window display is to catch the fleeting eyes of those passing by in an automobile and to declare loudly and effectively the name of the business so it is remembered.
A window display for the flower shop in a walk-by location should capture and hold attention. The function of the display is to influence the viewer to stop, and then to entice this prospective buyer to come into the flower shop. Designing a beautiful window just to be beautiful does not meet the objective. A window display that people look at but do not respond to has little marketing value. There are two key questions that must be addressed when planning a window display: What is the purpose of this window display, and how will it entice customers to come into the shop?
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Whether a window display is geared for automobile traffic or for foot traffic, it should be planned and designed with the principles and elements of display (similar to the principles and elements of design) in mind: balance, focal point, scale and proportion, viewpoint, rhythm and motion, harmony, and unity in theme. Elements of color, lighting, space and depth, merchandise, and signs all contribute to the success of a window display.
Once in the store, product presentation should move the customer throughout the store in a preplanned sequence (see Figure 21-13). For example, some shops position the display refrigerator with fresh flowers at the back of the store. This attraction pulls the customer through the store.
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By planning key displays that attract attention at various points through the store, customers move from one display to another. Ideally, the traffic flow initiated by interior displays should expose as much merchandise and as many ideas as possible.
Large flower shops and those presenting a wide range of gifts and accessory merchandise often plan displays in vignettes (see Figure 21-14). A vignette presentation makes a distinctive statement for a limited line of merchandise. It is a specific area defined by panels or other methods for containing a display. A vignette presents a line of merchandise, a theme, compatible items, or new ideas. Rather than having a central look or theme that goes throughout the store, using vignette displays enables a florist to present many different looks and themes.
All merchandise on display should be clearly priced. Unpriced merchandise frustrates customers and prospective buyers. Ideally, displays should include merchandise and designs in a wide range of prices. Then, customers and prospects who shop the store recognize that the business offers products in all price ranges comfortable to all buyers.
Presenting the full range of services a flower shop provides is another important consideration in product presentation. The flower display refrigerator should offer an attractive display of fresh flowers and designs. Attractive displays promoting bridal and wedding and party work intrigue many customers. If a shop creates fruit baskets and gourmet food gifts, the ideas should be visually presented in compelling displays. Engaging presentations with silk flower designs and compositions with dried materials often create impulse sales. The purpose of interior display is to show customers and shoppers the full range of products and creative services a professional flower shop offers.
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When visual merchandising has accomplished its primary goal, the next natural step is servicing the sale. The service area includes the sales counter and the consultation area. Many shops do not have the space needed for separate areas of service. Ideally, the sales counter includes the cash register and wrapping supplies (see Figure 21-15), while the consultation area includes selection guides with a place to sit down. These areas in the shop help customers make selections and purchases.
For servicing telephone customers, some flower shops have phones at all work stations. Large shops usually have an area or room for taking and receiving telephone, fax, and computer orders. Materials needed for taking and receiving orders over the phone, such as order forms, pens, selection guides, and telephone books, must be readily at hand.
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A well-planned flower shop makes working efficient and cost-effective. In designing the plan for a flower shop, attention must be given to the flow of products into and out of the operation.
The work area for designers must be organized. Conditions must be comfortable for employees. Tools and supplies must be organized and at hand. The cooler, sink, and hardgoods must be located near the design tables to lessen the time needed to gather supplies and prepare arrangements. Organized and uncluttered work stations increase productivity (see Figure 21-16).
Ideally, flowers and other merchandise should arrive in the rear work area or the receiving area. The office is sometimes in this area to organize and log shipments and deliveries. Everything required for proper care and handling should be convenient, including containers, the appropriate underwater cutting equipment, sinks, and water.
The delivery area, also at the rear of the store, is where outgoing orders are prepared for delivery. This area is where extra packaging for cold weather may be added and care tags, cards, and water levels are checked. In large shops, the delivery area is filled with shelves where arrangements are placed according to where they will be delivered--the hospital, hotel, funeral home, and various parts of the city.
Adequate storage space for hardgoods and seasonal supplies is essential. Items will last longer and stay cleaner when properly stored. When extra supplies, seasonal items, and window-display props are organized and out of the way, workers are able to free themselves of boxes and clutter and focus on the jobs at hand.
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The type of refrigeration unit a shop has often is determined by the volume of customers. Whether a shop has mostly phone customers or has a significant percentage of in-store customers will influence the type of cooler necessary. Whether flowers are sold mostly by the stem or in arrangements also will influence the type of cooler a shop needs. Coolers fall into two categories: storage and display. Large walk-in storage coolers hold flowers in buckets of preservative solution for use in arrangements, store boxes of fresh greenery, and keep arrangements cool and fresh while awaiting delivery.
Display coolers are a form of visual merchandising (see Figure 21-17). These coolers exhibit flowers by the stem, floral arrangements ready for sale, and floral arrangements ready for delivery. A variety of sizes and types of display coolers is available, meeting the needs of every kind of floral shop and mass merchandiser.
There are many different operational elements involved in running a successful retail floral shop. The following items of discussion are topics that are important. Depending on the subject, owners and managers and other employees must be knowledgeable and experienced in each item of concern. Owners and managers must select people who are skilled or may be trained in their position of responsibility. Today it is imperative to use computer software to help manage all aspects of running a floral shop. Other items such as marketing, advertising, promotion, public relations, salesmanship, and customer relations help to move the product from the store to the customer. A number of items such as wire service, buying and pricing, designing, and delivery, are important items of discussion, unique to the floral industry. Another vital topic is the management of people, products, and money.
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Employees and Responsibilities
In every flower shop, regardless of size, sales volume, and the number of employees, there are six distinct roles (see Figure 21-18). Many floral shops are owned by someone who oversees the day-to-day activities and also may be a designer or an accountant. He or she may work in the shop most days. Other floral shops may be part of a franchise or belong to a large corporation. These shops are still owned by someone, but the owner may or may not be in the shop to oversee the everyday enterprise. In this case there must be a full-time manager who supervises the business and directs other employees. Most items require a designer to complete them and make ready for sale. The products and designs in the shop are sold by an employee. In most shops, the majority of floral orders are delivered, so someone must make deliveries. And in all shops, someone must be responsible for the accounting.
In smaller shops, the same person fills several of these roles, while in larger operations, several people may complete each area of responsibility.
Today, computers and floral-specific software make it much easier to manage a flower shop. Several companies provide easy to use software packages that help run the operations of a business. With the right software, a floral shop can achieve a tremendous increase in productivity within a short time. Software programs offer many useful features, helping to process customer and wire-service orders, handle accounts receivable and payable, manage inventory, manage the payroll, and analyze sales data.
Computers have changed the way florists take orders from phone customers, from wire-service companies, and from in-store customers. The salesperson in a computerized shop enters orders directly on the computer (called online order entry) rather than writing down orders by hand on paper.
The cash register is an integral part of the computer system. As transactions occur, point-of-sale software can help track customer preferences and buying patterns. By entering the customer's phone number or name, within seconds, a window on the screen shows helpful information to personalize transactions for regular as well as new customers.
Marketing is everything a flower shop does to find customers, serve them professionally, assure unconditional satisfaction, develop customers with more frequent buying patterns, and maintain customer loyalty. The primary purpose of marketing is to create and keep customers (see Figure 2119). Marketing addresses fundamental questions about the customer, such as, "Who are the specific customers I want to find, develop, and keep?" and "What products and services must I offer to develop this potential?" These questions help identify a market niche.
Marketing includes all advertising and promotion directed to finding, developing, and keeping customers. Marketing and advertising should be focused on known buyers and targeted prospective buyers to influence them to buy, whether the media is direct mail, newspaper, websites, radio, television, door-to-door flyers, statement stuffers, or product samples. Thanking customers for their business, reminder services, and everything else a florist does to assure satisfaction and secure buying loyalty are included in marketing as well.
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Successful marketing is based on knowledge not just of what is selling, but of who is buying what is being sold. It is important to define the market. This information will result in identifying who the potential customers are and what these potential customers demand. The best way for a floral shop to increase sales and profits is to sell more flowers to the best and most loyal customers. The 80/20 rule of thumb applies in the majority of floral shops: 80 percent of the sales are generated by 20 percent of the customers. It is important for businesses to find out more about the 20 percent who are their loyal customers. Then the floral shop, for example, can aim advertising, displays, promotions, and floral styles on the loyal customers and their buying patterns and preferences. Successful florists understand that the long-range opportunity for a flower shop depends on developing loyal customers, not just selling arrangements.
There are three major market considerations that should be tracked: the product, the geographical area, and the demographic character of the population. A simple way to track loyal customer information is to record information at the point of sale. Several floral companies have point-of-sale software that makes it easy to track customers. This software allows customer data to be linked with transaction information, which tells who is buying what product. Once a florist knows certain characteristics about faithful customers, more like them can be sought out.
Many flower shops direct their focus on design, forgetting about the importance of marketing. Yet, without marketing, a florist fails to develop a loyal customer base to buy the design talent. In many flower shops, the lack of attention to aggressive marketing thwarts the growth and future of the business. Florists often say that they depend on word-of-mouth advertising to build their operations. While positive word-of-mouth advertising is important for success, it fails to provide enough consistent impact to influence sufficient potential customers to make a flower shop successful.
Recent consumer research conclusively identifies that the primary reason a customer leaves one flower shop to buy from another shop is because of lack of attention. When their purchases and buying loyalty are not acknowledged, customers feel that a flower shop does not appreciate or need their business. These important buyers do not become bonded to a specific retailer if the florist does not keep in contact with them. Unless customer bonding exists between a customer and a specific flower shop, the customer looks for another florist who will acknowledge his or her purchase loyalty.
To be successful, a flower shop must have a significant and solid base of loyal customers who consistently make purchases several times a year. The vital necessity of this loyal customer base is often overlooked by the retailer who does not recognize the importance of consistent customer communication. Marketing is the complete cycle of attracting, serving, satisfying, and keeping loyal customers who buy flowers frequently. The keeping-customers aspect of marketing is as important, and perhaps more important, than seeking new customers.
Advertising is paid media always directed to selling. To be productive, advertising must focus on presenting a specific idea, for a specific reason, at a specific price. Advertising is only successful and productive when it is part of an overall marketing plan. That plan must provide all of the necessary components: finding out about the customers and their preferences and then gearing the shop focus and advertising toward them. Floral shops often use newspapers, radio, television, and direct mail to advertise and develop sales.
Today, floral shops can advertise and compete in the growing cyber-marketplace by establishing websites. Online shopping has become for some the only way to shop and make purchases. A friendly, informative, eye-catching, and helpful floral website is enticing and leads to loyal, buying customers.
Promotion is the process of advancing the awareness of a flower shop, its products, and its services through special events and product demonstrations. A Christmas or spring open house is a form of promotion. The florist who gives a demonstration to a civic group is using promotion to advance the awareness of products, creative talent, and the flower shop. Promotion includes giving flowers for door prizes and other give-away events. Promotional efforts are never wasted. Potential customers are exposed to flowers and made more aware of the floral shop and its products. Promotion leads to potential customers feeling more comfortable in visiting and calling the florist who has introduced them to flowers and his or her floral shop.
Public relations includes everything that creates an image awareness of the flower shop or of flowers in general. Unless an advertisement presents a specific idea, for a specific reason, and at a specific price, it is public relations, not advertising. Using the "flowers-for-all-occasions" theme in paid media, for example, is public relations, not necessarily advertising, because it creates an image awareness but does not ask the customer to buy. Public relations efforts are extremely valuable for florists. When customers are exposed to a florist's name in a positive way, over and over, they are informed and influenced to patronize that particular floral shop.
The Society of American Florists (SAF), the American Floral Marketing Council (AFMC), floral companies, and large floral shops help to make the public more aware of flowers and their importance. Helpful websites offer answers to the public's floral questions and information on various floral subjects, such as care and handling, design tips, and wedding flower etiquette.
Salesmanship and Customer Relations
The moment a customer steps into a flower shop or is greeted on the telephone, customer service begins. Customer service does not conclude until the customer is unconditionally satisfied.
Customer service goes far beyond the tangible services given. The attitude of the employee performing the service makes a greater lasting impression in the customer's mind than the actual service. Ideally, every flower shop employee should provide flawless service with a positive, friendly attitude.
It is the customer, and only the customer, who makes a flower shop successful. As trite and overworked as this statement might be, it is still a fact of business success. Everyone who works in a flower shop must understand that customers make all jobs possible. Customer service is a means of ensuring business success and work opportunity for every employee. Personal Requirements for Selling
Salespeople must be properly trained to effectively and professionally present the products and services a flower shop offers. Training salespeople is an essential management responsibility. Salespeople must be friendly and enthusiastic and be able to communicate well. To serve customers competently, salespeople must be knowledgeable about the products available, design suggestions, the unique services a flower shop provides, and appropriate price ranges. A flower shop salesperson plays a consequential role in the success of the business.
Selling is the process of influencing a buying decision. Selling is giving the customer the confidence to exchange his or her money for the products and services a flower shop provides. It is the voice-to-voice interaction of the salesperson and the customer on the telephone, or the face-to-face meeting of customer and salesperson in a store situation.
Two types of salespeople work in flower shops. The passive salesperson looks at the selling responsibility as recording what the customer requests--simply taking the order. The passive salesperson gives little effort in helping the customer make an appropriate buying decision and influencing the purchase. In contrast, the assertive salesperson recognizes that professional selling is a process of asking questions, listening to the customer's responses, and then recommending the appropriate suggestion to fulfill the buyer's specific needs.
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It might seem that the passive salesperson is more customer-oriented, less aggressive, and, therefore, desirable to the buyer. Actually, the opposite is true. Few customers are well-informed about flowers, floral design, and the professional service a florist provides. Many buyers are hesitant to call a flower shop because they feel embarrassed by their lack of flower knowledge and do not want to appear uninformed.
The assertive salesperson creates a more comfortable buying climate for the customer. By asking questions, listening to the responses, and then offering the customer appropriate options, the assertive salesperson focuses on the customer's needs. Most customers welcome personalized interest and suitable suggestions. They want options from which to make a buying decision. This caliber of professional selling is an important value-added service that the professional flower shop provides.
In most flower shops, the majority of orders come in over the telephone (see Figure 21-20). The business image these buyers develop for a flower shop is the result of what they hear and perceive from talking to the telephone salesperson. Additionally, more than half of the orders placed by a customer are delivered by the flower shop to a third party and never seen by the buyer. Customer surveys conducted by some florists revealed that over half of the telephone buyers had never been in the flower shop. The primary image these buyers perceived for the shop was communicated by the telephone salespeople. This perception is the major reason professional, caring, selling skills are essential in every successful flower shop.
Telephone sales include taking traditional orders from customers and receiving and sending wire-service orders (see Figure 21-21). It is essential for salespeople to be familiar with the steps of taking telephone orders to work efficiently while on the phone.
The salesperson should answer every call promptly. A friendly greeting that includes the name of the shop is essential. The salesperson answering the phone should personalize the call by telling the customer his or her name. The initial greeting might be, "Good afternoon. Aloha Flowers. Julia speaking. How may I help you?" This approach to selling helps direct the conversation. Questions, such as, "Do you have a color preference?" or "Would you like those arranged in a basket or vase?" will help to quickly determine the desired item and will aid the customer in describing what he or she wants.
Next, the salesperson discusses prices by offering a range of choices. The customer should be made aware of any delivery, wire, or service charges that will be added to the price of the order. The sales staff then discusses the type of card and the message the customer would like included. It is important to have names spelled correctly.
Then, the salesperson obtains complete delivery information: the date for delivery and the recipient's name, address, and phone number. Often there are special delivery situations that must be discussed. Other information, such as hospital room number or business office hours, will assist in efficient delivery. Computer software allows florists to take an order for flowers with ease. Rather than writing everything down on paper, in a computerized shop, employees can enter information directly on the computer.
When closing the sale, the salesperson must discuss the method of payment and complete all the necessary information. If the customer has an account on file, helpful information such as the customer's address, credit card number, and credit status will be displayed on the computer screen in the appropriate blanks (Offering complete credit-card services is a necessity in servicing customers professionally as well as in improving cash flow see Figure 21-22.)
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When the method of payment is established, the salesperson should ask the customer if anything else is needed or if there are any questions. The salesperson should thank the customer for the order, invite future purchases, and end the call. It is important to let the customer hang up first, in case the customer has any last requests or questions.
Although telephone sales account for the majority of most flower shops' sales, in-store customers do contribute to the success of a business. Competent and friendly sales personnel help ensure happy and buying customers (see Figure 21-23). Personal interaction by observing and listening to customers allows the salesperson the opportunity to adjust the floral item or service to the needs of the customer. Customers coming into a floral shop may be classified in three ways: decided customers, undecided customers, and browsers.
The decided customer has a definite floral need. The customer may already know exactly what he or she wants to buy, including flower types, colors, and style. For instance, a customer may want to send a floral arrangement to her father, who loves bird of paradise and other tropical flowers, to celebrate his birthday. Another customer may want to send an arrangement of two dozen pink roses and baby's breath to his wife, who just had twin girls. The decided customers are the easiest to sell and do not need to be persuaded to buy.
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The undecided customer has a floral need, but has not determined exactly what he or she wants. This customer is the one who needs the most personal assistance from the sales staff. For instance, a customer wishing to send something to her sick friend in the hospital, or the young man who needs to order some kind of corsage for his date for the prom may both need to look at a selection book and the flowers on display. Both may need helpful suggestions from the sales staff.
Many customers who enter a flower shop are interested in flowers and the merchandise on display, but do not have a specific need to buy at the time. The window display, advertising, or word of mouth may have enticed them to come into the store. When approached by the sales staff, browsers often respond that they are "just looking." These customers are hardest to sell. They may be looking for an idea or a bargain, or shopping prices. They are not interested in being pressured to purchase anything. This person is a potential customer and may be persuaded to make a purchase while browsing or return to make a purchase. For instance, a bride-to-be may be anonymously shopping around to look at several floral shops' merchandise, style of design, prices, and service. Just by the way she is treated as an "unknown" customer may be the key factor that brings her back to a certain shop to order her wedding flowers.
The commonly used term "flowers-by-wire" is somewhat misleading. In the early days of the floral industry, flower orders were transmitted by wire or telegraph. Today, out-of-town orders are transmitted by telephone, computers, and fax machines. The transfer of orders between the shop that originates the order and the one that fills and delivers it represents significant sales volume for many shops.
The mechanics of flowers-by-wire or the wire service are a mystery to the person who is not familiar with the process (see Figure 21-24). A flower shop in one city sells an order for delivery in another city, state, or country. The customer pays for the specific flowers ordered, a delivery charge, a service charge, and appropriate sales tax. The florist who sold the order, the sending florist, "sends" the order (calls or sends an e-mail or fax) to a florist in the city of delivery. This flower shop, the filling florist, fills and delivers the order as specified by the sending florist.
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There are several wire-service companies that provide the services enabling florists to transfer orders. For the majority of florists, FTD (Florists' Transworld Delivery Association), AFS (American Floral Services, Inc.), and Teleflora are generally the first choices when it comes to selecting a wire-service company. They remain the largest services providing adequate geographic coverage and their membership includes many of the finest florists. However, there are smaller wire-service companies, such as Carik Services, Inc., and others that provide services to transfer flowers from one shop to another.
FTD has a strong national advertising program and provides its members access to the Mercury network system, a computerized communication system that relays orders from one shop to another (or from the sending florist to the filling florist). Most FTD florists have a Mercury terminal that will transmit orders. Floral shops that do not have a terminal relay their incoming and outgoing orders manually over the phone.
Teleflora also has a large national advertising program. It promotes its own containers and accessories for the particular floral arrangements being advertised. Florists must purchase containers from Teleflora in order to make up the designs correctly. Teleflora has the Dove communications system and excellent floral computer software.
AFS provides educational programs and workshops and has several of the finest computer systems available to florists.
Each wire service consists of florists who send and receive floral orders to other shops on a daily basis. Each wire service has a head office or clearinghouse that processes the transactions taking place between florists. The wire service prepares a statement for each flower shop and acts as a bookkeeping service, ensuring florists that each shop will receive proper payment for transactions.
In recent years, another dimension has developed in flowers-by-wire. Companies such as 1-800-FLOWERS and other similar services work with national television advertising and other media to influence buyers to call them directly to place their flower orders. Though these services are only sales agents that transfer orders to flower shops for filling, they function as sending flower shops. Many floral shops provide websites and flowers can easily be ordered by customers from their own personal computers.
Buying and Pricing
Most florists buy products from their local wholesalers and from out-of-town suppliers. Both perishable and hardgoods products are available from many sources. The buyer for a flower shop must locate the very best supply sources for the specific operation. With perishable products it is essential for the buyer to be connected with reliable sources that understand the shop's requirements for selection, quality, freshness, and price. Buying involves researching markets and suppliers, gaining product knowledge, developing a purchase plan, and controlling inventory.
After making a desirable purchase, profit control begins with pricing (determining the retail price of products). There are no general guidelines or infallible formulas for pricing. Every flower shop has specific pricing requirements based on the type of operation, expenses, merchandise, and profit requirements. Therefore, profitable pricing demands that the owner or manager understands the complete costs of operating the business. Without this knowledge, pricing is only an estimate that seldom produces a profit.
Retail florists typically price their products and services on the basis of a predetermined ratio markup, which is figured on the cost of merchandise sold. For example, a 2-to-1, 3-to-1, and 4-to-1 markup on an item that costs $1 wholesale would give a $2, $3, and $4 retail price, respectively. The problem with this markup system is its failure to control and maximize net profits. This system does not consider the impact of operating expenses, overhead costs, and the shop's net profit goals relative to the ultimate retail price. Attaining desired net profit goals necessitates retail pricing policies that utilize a percentage markup to fully cover overhead and operating expenses, the cost of merchandise sold, and the individual shop's net profit goals. In figuring prices of designs, many florists will add the retail costs of materials and then add on 20 percent for labor. This method is generally shortsighted pricing, with many of the hidden costs that go into making a design not being charged for. Some florists find that a five-times markup covers the cost of materials, delivery, and labor.
Another method of figuring costs is called the standard divisional pricing method. This method not only covers the cost of goods, but also includes labor, operational expenses, and profit. Although standard divisional pricing may require more time and consideration initially, once it has been incorporated by the floral shop, it is easy to work with and maintain. The standard percentages are as follows:
Cost of goods = 30% Operational expenses = 35% Labor = 20% Profit = 15% Retail selling price = 100%
The percentages may change according to the shop's financial statements. Flower shop records from the previous year should be used to calculate these percentages reasonably. A varied divisional pricing method may also be used that adjusts the percentages, allowing for a higher or lower selling price. For example, the range typically used for cost of goods is 20-35 percent. If the total cost of goods is below 20 percent, it may be possible that the shop is charging too much for its merchandise. If the total cost of goods is over 35 percent, the shop is probably not charging enough.
To figure the price of a flower arrangement using the standard divisional pricing method, simply add up the wholesale prices of everything tangible that goes into the bouquet (container, flowers, foliage, foam, ribbon, and so forth). Once that total is determined, the other expenses can easily be figured, as well as the retail selling price. For instance, if the wholesale costs of goods of the items in a design add up to $15.60, simply divide $15.60 by .30 (30 percent allowed for cost of goods) to figure the retail selling price.
$15.60/.30 = $52.00 (which would be the typical selling price)
From the known selling price of $52.00, the other parts to the pricing formula can be figured, simply by multiplying the usual percentage by the retail selling price:
$52.00 x .35 (operational expenses) = $18.20 $52.00 x .20 (labor expenses) = $10.40 $52.00 x .15 (profit margin) = $ 7.80 $52.00 x .30 (cost of goods) = $15.60 Retail selling price = $52.00
Although using the standard divisional pricing formula to figure prices is a better system than ratio markup, it does not always allow the florist to alter the prices as needed. To do this, simply raise or lower the percentage amount for cost of goods and adjust the other percentages in order to end up with 100% for the retail selling price. Often the standard percentages of the pricing formula must be altered to allow for the extra time needed to make corsages, head wreaths, bridal bouquets, and other labor-intensive designs. These items must be priced higher in order to cover the labor and skill required for these designs. To allow for this, the percentages are adjusted. For example, a head wreath containing roses, baby's breath, ribbons, wire, and floral tape requires a variation in percentages in order to cover expenses and make a reasonable profit. Shown below are both the standard and the varied percentages figured for the same head wreath:
standard percentages cost of goods (30%) = $ 4.50 ($ 4.50 / .30 = $15.00) labor expenses (20%) = $ 3.00 ($15.00 x .20 = $ 3.00) profit margin (15%) = $ 2.25 ($15.00 x .15 = $ 2.25) operational expenses (35%) = $ 5.25 ($15.00 x .35 = $ 5.25) total: (100%) $15.00 varied percentages (to allow for labor-intensive design) cost of goods (20%) = $ 4.50 ($ 4.50 / .20 = $22.50) labor expenses (30%) = $ 6.75 ($22.50 x .30 = $ 6.75) profit margin (18%) = $ 4.05 ($22.50 x .18 = $ 4.05) operational expenses (32%) = $ 7.20 ($22.50 x .32 = $ 7.20) total: (100%) $22.50
The varied percentage formula shows that by altering the percentages and lowering the percentage of the cost of goods, the higher selling price will allow for the extra time involved in creating labor-intensive designs, as well as for the special design skills required, and also allow for additional profit.
Profitable flower shop managers use several methods of design control (see Figure 21-25). For standard, production designs in which the same design with the same contents is repeated, a content list and labor charge for each design is prepared. From this design formula, the designer knows the exact amount of materials to select.
Every shop uses production design throughout the year. Many holiday designs featured by a flower shop are production designs. Some of these designs are dictated by wire services. Other shops prefer to create their own featured holiday specials rather than promote designs available in every flower shop. In any production design, the selling price, the contents, and the design labor charge are predetermined before production begins. For example, producing ten centerpieces for a party requires a content plan for each design. The designer then repeats this plan ten times. Many areas of professional design require a prototype and a master design plan that is repeated several times.
Preplanning designs enables the manager to determine the exact amount of materials to order. By making a design plan for each item required in a wedding or other special event, the manager can intelligently plan product needs and control the use of materials. Unless a flower shop manager carefully plans and controls the materials required for a certain occasion, the job could be a profitless experience. Likewise, the amount of labor that goes into weddings, parties, and other events must be anticipated and charged for when pricing the work. Equally important, the labor expended must be controlled to make the job profitable.
[FIGURE 21-25 OMITTED]
Most everyday floral designs sold and created by the typical flower shop are produced to presold price points, for example, $20, $35, and $50. The designer who understands profitable design knows that the contents of the design must be predetermined based on the selling price. The contents are then selected and placed in the design. The sequence is essential. The first step is to figure out the exact contents of the design based on the selling price. Then, select the perishable materials and place them in a container with water on the design bench while gathering the hardgoods. Next, create the design with the preselected materials. This disciplined process for creating each design controls the exact contents that go into a design. Without content control, it is impossible to operate a profitable flower shop.
Some orders are "open," meaning the designer decides both the contents and the price. Even for the open order, materials must be preselected, the selling price must be determined based on these materials, and an appropriate charge for design labor must be assessed before the designer creates the design.
The most risky and unprofitable way to produce a design is to create it without content preplanning. This procedure requires the designer to count and price everything used after the design is completed. Not only is this method time-consuming, it is an inaccurate control process that creates profit problems for many flower shops. Even more disastrous is the procedure of creating a design to look like a certain price range without counting the materials used. Floral design is a manufacturing process, and because it is, the products and labor that go into any design must be controlled. A profitable price must be charged for every item included in a design, plus an appropriate charge for design labor.
A serious problem in many flower shops is the undisciplined work habits of designers. The profitable designer works with an explicit control system requiring that the contents of each design are recorded and priced before creating it. Those designers who create and then try to justify the design to the price without an itemized list of contents seldom make a reasonable profit for the flower shop.
Equally important as design control and pricing for profit, a designer has a responsibility to the customer. The design created must be appropriate from the customer's perspective and satisfy without compromise both the sender and the recipient.
Customer research identifies the two key factors that influence customer satisfaction in floral design. First, customers react positively to a design that is pleasing and "comfortable to the eye." To this end, unless the creative expectations of the customer are well known, the more conservative approach to professional design is the best decision. Second, flower shop customers expect a design to provide appropriate visual value. A floral design must look the price.
Both customer-satisfaction factors are subjective. A design favorable to one customer might be unattractive to another. The expectations for appropriate visual value are sometimes difficult to define. One customer may want a design to be as large and showy as possible, while another customer, spending the same amount of money, may expect the design to be quietly elegant. Understanding these differences in customer expectations is an essential responsibility of a floral designer.
Although it is an essential value-added service for a professional flower shop, delivery is a difficult function to manage. Most customers have immediate, same-day delivery needs. Since a flower shop is a manufacturing operation, orders must be sold, designed, and delivered within a short period of time. Managing the flow of orders so they can be delivered as required is a challenging task demanding time-related efficiency. Seldom is there a systematic flow of orders in the typical flower shop. The nature of a florist's on-demand service means that employees must be responsive to the pressures to produce within the delivery requirements of the day.
Like a salesperson, the individual who delivers floral arrangements is an important spokesperson for a flower shop. The quality of the shop and the implied quality of the products and services provided are communicated by the appearance of the delivery person and the delivery vehicle, as well as the attitude with which the delivery is completed.
[FIGURE 21-26 OMITTED]
Florists use three primary methods of delivery: self, delivery cooperatives, and commercial. Some florists deliver all their orders with their own trucks and drivers. These retailers do not want to release the control and responsibility for delivery to another florist or an outside service. They believe that it is important for their vehicles bearing their shop name to make all deliveries (see Figure 21-26). These florists prefer to have complete control over the delivery of their orders and the personnel who deliver them.
Other flower shops belong to pool or cooperative (co-op) delivery associations. In this method of delivery, a florist brings its deliveries to a central location by a specific time. Deliveries are sorted according to delivery areas. Each florist in the pool completes deliveries to a defined area. Florists who belong to delivery pools and co-ops find that this method lowers the cost of delivery.
Some florists use commercial delivery services. These specialized delivery companies pick up deliveries at a flower shop at certain times each day. Usually, a commercial delivery service covers a far greater area than the delivery area of the florist or delivery cooperative, enabling a flower shop to deliver to an expanded area. A commercial delivery service usually provides delivery for less cost than a florist making its own deliveries. However, florists using a commercial delivery service maintain at least one vehicle for special delivery requirements.
The cost of delivery is a significant expense in operating a flower shop. Although most shops charge for delivery, seldom does this charge cover the actual cost.
There are three critical responsibilities of managing a flower shop or management. The successful manager must supervise people, control the buying, use, and movement of products, and administer the flow of money into and out of the business. People, products, and money are the three key areas of flower shop management.
[FIGURE 21-27 OMITTED]
Supervising people begins with hiring--having the right people--and then properly training each employee to carry out his or her responsibilities efficiently and productively. Since a professional, full-service flower shop sells, manufactures, and delivers, employees must be qualified to fulfill their responsibilities with cost effectiveness. They must be accountable for profitable performance.
Operating a profitable flower shop requires focus on the two major areas of cost: labor cost and product cost. In every flower shop operation, failing to control these two costs causes the business to be unprofitable.
To control the cost of labor, employees must be competent to produce proportional to their wages. A profitable operation measures the productivity of employees by monitoring what they do (see Figure 21-27). The manager must know how much a salesperson needs to sell each week to be a profitable employee. Records must be maintained to verify performance. Also, appropriate production requirements must be determined for designers and records must be kept to evaluate performance. In small flower shops, there is significant crossover between jobs. In these situations, adequate performance standards must be established to evaluate performance.
Every profitable flower shop knows the exact relationship that must be maintained between payroll costs and production. The management responsibility is to control labor so that this cost-to-production relationship is kept in profitable balance.
An effective manager communicates clearly. Regardless of the size of the flower shop and the number of employees, people want honest and dependable answers about expectations, evaluations, and rewards. Finally, managing people requires the ability to inspire, motivate, and cultivate capabilities.
A flower shop owner or manager controls the purchase and movement of two types of products: perishables and hardgoods. Products must be purchased, priced for profit, and then managed intelligently through the product turnover cycle.
Buying the right product, whether perishable products or hardgoods, is only the beginning of product management. Every purchase of product represents an investment. The primary purpose of this investment is to provide a profitable return. Many shops call this management of the inventory responsibility profit control. Because of the perishable nature of many products sold in a flower shop, controlling inventory is a major management responsibility in operating the business profitably.
A flower shop must have ample money to support the operation. In accounting terms, this money is known as working capital. To operate efficiently, a flower shop must have adequate cash flow to have money available to buy products, pay suppliers, and cover the operating expenses, including payroll.
Responsible money management requires a written financial operating plan. Often, a florist is not skilled in money management. Administering the finances of any flower business demands timely attention to all financial details. Unless a shop is large enough to maintain an employee trained and qualified in financial management, it is imperative that the flower shop work with an outside accountant or accounting service. Also, the accounting work must be completed on a timely basis each month. The cost of this financial service is a wise investment, pays for itself, and returns valuable dividends.
The retail flower shop is a method of distribution that unites the final consumer with flower products and creative services. As a link in the distribution channel, a flower shop must enhance the product with value-added services that customers find desirable.
The type of operation of flower shop owner wants to develop and the target market to be reached dictates the style of the business. In the marketplace, there are specific niches of opportunity for full-service flower shops, specialty shops, limited-service flower shops, and flower merchandisers. The type of business often prescribes the ideal location for the shop.
Marketing, advertising, promotion, and public relations perform specific functions in building a flower business, and thus the floral industry. For the industry to thrive, consumers need to be made more aware of flowers and reasons why they should make purchases.
Although knowledge and skill in design work are essential, they are not the keys to running a successful flower shop. Other vital factors include experience and knowledge in implementation of visual merchandising, efficient shop layout, employee responsibilities, salesmanship, customer relations, buying and pricing, and wire and delivery services.
Terms to Increase Your Understanding
full-service flower shop
limited-service flower shop
specialty flower shop
standard divisional pricing
strip-center flower shop
Test Your Knowledge
1. Explain the function of a retail flower shop.
2. What is value-added service?
3. Outline the differences among a full-service shop, a specialty shop, a limited-service shop, and a flower merchandiser.
4. What are the four primary goals of displays?
5. What is the general sequence of taking a traditional order or receiving a wire service order?
6. How do passive and assertive salespeople respond to selling and customers?
7. How are in-store customers classified?
8. Describe how a wire service functions.
9. What are the key responsibilities of a designer in creating a profitable design?
1. Visit several different types of flower shops in various locations. Describe the pros and cons of your observations.
2. Plan a window display around a month, season, or occasion. Establish how it might be different for automobile and foot traffic.
3. As a group, present merchandise in vignette. Discuss how the primary goals of displays are met.
4. Visit a floral shop. Notice how key displays influence traffic flow in the store.
5. Practice salesmanship through role playing with several types of customers and with passive and assertive salespeople.
6. Fill out a design control worksheet. Make the planned arrangement.
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|Title Annotation:||Section 5 The Floral Industry|
|Author:||Hunter, Norah T.|
|Publication:||The Art of Floral Design, 2nd ed.|
|Date:||Jan 1, 2000|
|Previous Article:||Chapter 20 Harvest and distribution.|
|Next Article:||Chapter 22 Careers and continuing education.|