Where have all the florists gone?
Rick Wood
Jane Pennycuff puts together an arrangement of flowers at Chamberlain’s Flower & Gift Shop in Dousman.
Click to enlarge
It's pretty and it smells good, but running a flower shop has become one tough business.
"Let me ask you this," said Jane Pennycuff, owner of a retail floral operation started in 1915 by her grandfather after he lost an arm working as a brakeman on the old Milwaukee Road, "Last time you bought flowers, where'd you buy 'em?"
Told, sheepishly, that the purchase had been at a supermarket, Pennycuff declared, "There's your answer."
That, however, is only one part of the more complicated answer to the question, "Where have all the florists gone?"
Pennycuff, owner of Chamberlain's Flower & Gift Shop, happens to be thriving, with locations in West Allis and Dousman. But across the Milwaukee area, Wisconsin, and the entire country, the ranks of flower shops are drooping like week-old roses.
Over the last 10 years, Wisconsin's total has fallen by 37%.
Only two categories of retailers have seen greater declines — "office supplies, stationery and gift stores" (down 43%), and the hard-pressed "bookstores and news dealers" (down 51%).
The numbers are drawn from one of the most comprehensive of the government's business databases, the Quarterly Census of Employment and Wages.
The nationwide flower shop falloff almost exactly matches Wisconsin's in percentage terms. Across metropolitan Milwaukee, the decline has been even greater — 105 shops in 2003, dropping to 61 last year.
"The industry changed so much," said Karen Korene, who owned Kummer Florists for about 15 years before shutting the doors in 2009.
Online order-takers
It started with supermarkets and other retailers offering alternative locations for flower buying. Then the growing use of the Internet gave added punch to existing floral wire services and spawned new Web-based firms, some of them wrapping themselves in local disguise.
The latter trends appear to be the most potent forces chipping away at brick-and-mortar florists.
It wasn't until the mid-'90s — the dawn of the Internet age — that the Society of American Florists started seeing its membership numbers drop. The organization boasted 18,000 members then, said CEO Peter Moran. The current count: about 6,000.
With the Web came new market participants that brick-and-mortar florists contemptuously call "order gatherers."
They use prominent, paid listings on Google to attract customers to their Web pages, which feature photos of scores of flower arrangements for different occasions — anniversaries, birthdays, funerals. When an order is placed, the Internet firm typically forwards it to a local florist who provides the flowers, builds the arrangement and makes the delivery.
For this, the Internet company gets as much as 35% of the ultimate bill, plus a service charge of perhaps $15 or $20 from the consumer, Pennycuff said.
"So they've gotten 35% from me, and they've gotten $14.95 or $19.95 from you," she said. "That's pretty good money for doing absolutely nothing but sending an order on to somebody."
An executive with 1-800-Flowers.com Inc., one of the larger companies that take orders via the Web and contract with local florists to fill them, said the firm receives 20% of the sale price. And 1-800-Flowers brings value to the table, said the executive, Mark Nance, president of the firm's BloomNet unit.
With its advertising and marketing muscle, the company helps all florists by promoting the purchase of flowers and keeping them on the public's mind, he said.
"We fight anyone else that's in the gifting space...to try and keep that order as a floral order as opposed to it being a book, or versus it being something else," Nance said.
Long-distance runaround
Cutting the order-taking firm in on the sale has long been part of "wire" transactions (the term stems from telegraph days), where a nephew in, say, Milwaukee, buys flowers for a beloved aunt in, say, Albuquerque, N.M.
The difference today is that much of florists' mainstay local business — flowers ordered by a Milwaukee resident for delivery in Milwaukee — now is being routed through distant Internet order-takers who get a percentage of the sale.
That leaves little profit for the florist, said Chris Dobs, co-owner of Urban Sense Flower Shop, 5402 W. Vliet St. The store stopped accepting orders from Internet firms five years ago and has benefited from the change, he said.
"They ask for such high premiums, and you have to follow certain recipes," Dobs said. "It really blocks your creativity."
Another problem for brick-and-mortar shops are companies that position themselves on the Web as local when they may be thousands of miles away.
Search on Google for "Madison flowers," for example, and the top listing — a paid placement — takes you to a site called madisonflowers.com. The site's home page describes the firm as "Madison's One Stop Flower Shop," and "Madison's best online florist!"
It's only three pages deep that the site says it is owned and operated by a company called Gift Services Inc., of Vancouver, Wash.
Gift Services operates sites with nearly identical promotional language targeted at other cities, including Minneapolis; Pittsburgh; Cleveland, Ohio; Nashville, Tenn.; and Cincinnati. A company executive could not be reached for comment.
Keeping competitive
Meanwhile, everyone selling flowers, whether they're a tech-savvy Internet operation or a tiny mom-and-pop store, has been working a slow-growing market.
From 2003 through 2013, U.S. consumer spending on the category the federal government classifies as "flowers, seeds and potted plants" increased just 6%.
Overall spending for personal consumption items rose by 48% — eight times as much.
All in all, it's a difficult environment in an industry that, with its low barriers to entry and appealing product, traditionally attracted many people with a relatively casual approach to business, said David Coake, editorial director of Florists' Review, a trade journal.
"Many of them will tell you that they just cannot compete," Coake said. "They will say they don't know how."
Now, though, there's no other choice.
For Dobs, the answer has been to carve out a niche specializing in weddings and what he called "more unique, long-lasting, interesting flower arrangements."
Pennycuff, on the other hand, has made Chamberlain's a leading filler of orders from Internet-based firms by stressing reliable delivery and quality. Such orders now are "probably edging toward 65%" of her overall business, she said.
The profits aren't as great as with strictly local orders, but she said she still can make money by smart flower buying and maintaining a good working relationship with a wholesaler. Chamberlain's also puts together fruit baskets and sells ice cream at its shops, 6737 W. Washington St. in West Allis, and 133 N. Main St. in Dousman.
"A smart business person has to diversify," Pennycuff said.
In working extensively with the Internet firms, she may be embracing a system she also criticizes, but times have changed.
"You have to have a different frame of mind," she said.
About Rick Romell
Rick Romell covers general business news and retail. He has won or been runner-up for national awards for business feature writing, coverage of Milwaukee's economic future, the personal toll exacted by job loss, the impact of Chinese manufacturing on Wisconsin, and the discovery of chronic wasting disease in the state's deer herd.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.