It could just be that the higher cost of gas and food has made people think twice about buying those luxury floral goods. Certainly, if it comes to putting food on the table or buying flowers, the choice is simple. But the population that’s sailing that close to the wind is not a significant portion of floral buyers. They’re making other choices, such as what kind of shoes they can afford to buy their children.
Something else is going on. I’ve heard that one of the first businesses to suffer during slow economic times is the highend restaurant. This seems a bit strange, as the group that enjoys an expensive meal is the least affected by this kind of economy. Perhaps it’s psychological? Every purchase decision is made on a judgment of utility: How much pleasure do I get from the good meal vs. the cost of the meal?
In the case of fine dining, utility is measured by relative pleasure derived from the experience. Even a slight shift in the mass psychology of the affluent can have great effect on total group behavior. I know I have a sense of great concern about the future. Will things get worse before they get better? The uncertainty causes us to act more cautiously and conserve what income we have. Will this behavior have a big effect on floral sales? What can we do about it? We have long held the belief that recessions are good for our industry because people stay home more and buy a few plants to feel better (utility). Is that still true? Was it ever true? I don’t know the answer to either of these questions.
I do know that things change constantly. I do know that I derive more utility from my iPod Nano than almost anything I own. I can download books and magazines and podcasts to listen to while driving to and from work or walking on a treadmill. If the device were to break, I would replace it immediately. A few years ago, I didn’t have the choice of buying this device. Times change, products change.
As an industry, how much have we changed? I see incremental changes, with a little better product here and little better signage there, but nothing that would grab the general consumers’ attention. We must find better offerings to win back this market. Consumers want to feel good about what they buy. Sustainability is a growing piece of the package, but it’s still only a piece. Nobody is going to buy floral products that look lousy just because they make a green claim. The stuff we sell must have a compelling value proposition. Flowers and plants that last longer and require less care would be a good start.
And from there we must do more. Our products must become more beautiful and eye-catching than anything we’ve done before. Choosing to do the same old thing is a plan to fail. Everyone in the value chain, from grower to retailer, must pursue this change aggressively and take a few risks along the way. Some failure is inevitable—we won’t achieve our shared goal of increased consumer spending on floral without passing through some product failure from time to time.
We’re also going to have to become more efficient at every level. High volume at low margin is the new world we all live in. If you have a different situation from this, just wait … competitors will make sure your margins get compressed. It doesn’t matter if you’re a retailer or a producer; the same laws of economics apply.
Creativity is the only solution. Consumers are fragmented in their tastes, wants and needs. Mass-produced, “single look” products are yesterday’s strategy. Fortunately for us, humans are a creative species. We just need to allow a little more of this creativity on the shelves to see how consumers react. With renewed effort, we will find great offerings for our consumers, and they in turn will fall back.
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