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Over the past few years, some florists have complained vehemently about the business practices of "order gatherers", those businesses (some with no actual florist shop location), who through their operations & marketing, obtain floral orders from consumers, and then send those orders through various wire services to florists for order fulfillment.   With this practice, the florists’ out-going wire "sending fee" is commandeered by the "order gatherers".   With the increasing consumer use and popularity of the Internet, many florists assert that the practice of "order gatherers" has been increasing in the US.   Prince & Prince, an industry leader in US floral market research, again is able to provide accurate and timely market information about florists’ wire order practices to the industry through its 2005 US Florist Tracking Research (see About the Florist Tracking Research).

In this reporting, we detail a small part of the 2005 Florist Tracking Research, florists’ wire-order sales, and out-going wire transactions (two questions from the 200+ queries in the tracking research).  In addition, we make wire-sales trend comparisons with our earlier florist-tracking studies (2003, 1,019 florist respondents; and 1998, 1,007 florist respondents).   We then segment these overall wire sales trends by key florist characteristics (e.g. sales level, ten US regions, age of shop owner, etc.) to identify the salient florist market segments that are leading or trailing the national wire-order sales trends.   Overall, our florist-tracking results show that US florists are less reliant on wire-order sales now, compared with the late 1990’s.   Also, since 1998, florists have continued to lose out-going wire transactions (sending fees) to "order gatherers" throughout the US.

In our US Florist Tracking Research, florists indicate their level of wire-order sales as a percentage of their total sales (Figure 1).    For our 2005 study, about 11% of florists indicated no wire-order sales, about 10% reported wire sales of 1% to 5%, almost one-quarter reported wire sales of 6% to 10%, almost one-third reported wire sales of 11% to 20%, and nearly one-quarter of florists reported wire sales in excess of 20%.   On average, wire-order sales represent about 16% of florists’ total sales in 2005.

Compared to our two earlier US florist studies, florists’ wire-order sales have registered a continuing decline.   In our 1998 US florist research, wire-order sales represented 20% of florists’ total sales, on average.   Florists’ wire-order sales fell to 17%, on average, in our 2003 US florist tracking research, and have fallen further still to 16% in our 2005 study.   Thus, since 1998, US florist wire-orders have fallen from 20% to 16% of total sales, or about a 20% decline.   This indicates that florists have become much less reliant on wire-order sales as a component of their overall sales mix.

To gain a better understanding of florist wire-order sales trends, we segmented each year’s trends by florist characteristics to identify the key florist groups leading the industry wire-order sales trends.   Table 1 shows florists’ wire-order sales trends segmented by florists’ annual sales.

The data trends in Table 1 show that for 2005, larger-sized florists (annual sales over $500,000) have lesser reliance on wire-order sales than do smaller-sized florists (annual sales under $500,000).   Between 2003 and 2005, florists in the $250,001 to $500,000 sales range, and those in the $500,001 to $1 million sales range witnessed statistically significant declines in wire-order sales.

Table 2 shows florists’ wire-order sales segmented by urbanization (the level of urbanization of the primary market served by the florist respondent).   While most florist urbanization groups showed some declines in wire-order sales for 2005, florists serving city or town markets (population under 50,000), and those serving central cities of metro areas registered statistically significant declines in wire-order sales since 2003.   Thus, wire-order sales declines occurred in both small city markets and in the largest central city metro areas of the US.

Across the major regions of the US, florists’ involvement with wire-order sales shows substantial variation in 2005 (Table 3), ranging from 13% to 22% of total sales.   Florists in the West North Central, West South Central, and Middle Atlantic regions generally show the lowest relative involvement, while those in the Mountain region, and in the Lower South Atlantic region show the highest relative involvement.   Since 2003, florists in the Middle Atlantic, West South Central, and Pacific regions exhibited statistically significant declines in wire-order sales.

The P&P US Florist Tracking Research also examined florists’ wire-order sales segmented by age of the florist shop owner (Table 4).   For 2005, younger florist shop owners generally show lesser involvement with wire-order sales, compared with their elder counterparts.   While every florist age group witnessed at least some declines in wire-order sales since 2003, the youngest age group (florist owners under the age of 35) witnessed large, statistically significant declines in wire-order sales.

The P&P US Florist  Tracking Research also measured the percentage of the florists’ total wire transactions that are out-going (wire sends), for other florists to fulfill.   For this reporting, we designate these out-going wire transactions as "out-wires".   The percentage distribution of florists’ out-going wire transactions is shown in Figure 2.   More than one-third of florists indicated that out-wires represented 10% or less of total wire transactions, and about one-quarter of florists indicated that out-wires comprised between 11% to 20% of total wire transactions.   About one-fifth of florists indicated that out-wires represented 21% to 40% of total wires, while another one-fifth of florists indicated that out-wires were over 40% of total wire transactions.   On average, florists’ out-going wire transactions represented 26% of total wire transactions in 2005.

If the US florist industry were a "closed" system, comprised only of traditional retail florists, who send and receive wire orders, then the industry average out-going wire percentage across all florists (of total send & receive wire transactions) should be 50%.    In our survey, some florists are heavy "senders" and others are heavy "receivers", but the industry average of out-wire transactions should equal 50% in a closed florist system.   But "order gatherers" have now changed the equation.   Order gatherers comprise business entities that collect floral orders from consumers and businesses and transmit those orders to florists for order fulfillment, but entities that generally do not receive and fulfill floral orders.   Since our survey indicates that the industry average of florists’ out-wires is now only 26%, this suggests that florists, on average, have lost about 48% of out-wire transactions to these "order gatherers" (50% - 26%/50% = 48%).   This is a substantial portion of florists’ out-going wire transactions that have been commandeered by the "order gatherers".    In addition, florist out-wires have declined significantly since 2003 (Table 5), suggesting that these order gatherers have recently made in-roads on florists’ wire sends.

While one can make the argument that the marketing activities of the "order gatherers" actually generate more wire-order sales for florists to fulfill, that argument is not supported by the declining trend in florists’ wire-order sales since 1998.   If "order gatherers" were truly generating much more wire orders than the typical florist, then wire-order sales as a percentage of florists’ total sales should show increases across the US florist industry, not declines.

This floral market research has provided valid, scientific evidence that US florists’ wire-order sales have been on a declining trend since the late 1990’s, as US florist wire-order sales have fallen about 20% since 1998.   In addition, US florists are continuing to lose more and more out-wire transactions (wire sends) to the "order gatherers", as florists currently lose almost half of all out-wire transactions to these "order gatherers".

We welcome comments from the floral industry on this statistical reporting.

About the P&P US Florist Tracking Research. This floral marketing research, being provided in a Power-Point Seminar format, is a marketing resource for the entire floral industry. The Prince & Prince US Florist Tracking Seminar provides current market information and trends on over 200 metrics including the following: 1) US Retail Florist Operations, 2) Types of Sales (e.g. in-store, wire, Internet, weddings/parties, sympathy, commercial), 3) Product Mix (cut flower mix, cut form mix, potted plant mix , silk and drieds, and hardgoods/gift shop items), 4 Florist Service Offerings (14 measures), 5) Recent Resource Allocations (20 measures), 6) Direct Buying Activity and Reasons for Direct Buying, and 7) Demand "Momentum" Trends for 5 rose classes, 6 rose sources (country of origin), 8 basic cut flowers, 32 novelty cut flowers, 12 filler cut flowers, 12 tropical cut flowers, 20 potted flowering/green plants, and demand trends on more than 30 hardgood/gift shop items. The seminar is based on survey responses from 1,048 randomly-selected retail florists throughout the US in 2005, and extensive trend comparisons are made with the 2003 and 1998 P&P US Florist Tracking Research. All information in the seminar is segmented by ten US regions, urbanization level of the florist market served, age of florist shop owner, and size of the florist business to identify florist segments leading or trailing the trends. For more information about the 2005 US Retail Florist Tracking Seminar, visit the Prince & Prince web site. 

Regional Definition:  The ten regions of the US, and the states that comprise each region are defined as the following: New England (CT, MA, ME, NH, RI, VT), Middle Atlantic (NJ, NY, PA), East North Central (IL, IN, MI, OH, WI), West North Central (IA, KS, MN, MO, NE, ND, SD), Upper South Atlantic (DC, DE, MD, NC, VA, WV), Lower South Atlantic (FL, GA, SC,), East South Central (AL, KY, MS, TN), West South Central (AR, LA, OK, TX), Mountain (AZ, CO, ID, MT, NM, NV, UT, WY), and Pacific (AK, CA, HI, OR, WA).

Significance Tests.  In the data tables of this report, a statistical test called "Analysis of Variance" (ANOVA) with Duncan's Multiple Range test was used to qualify the significance of mean differences in the trend measures across florists' business characteristics (segmentation groups). ANOVA with planned single degree-of-freedom F tests was used to test differences across the 2003 and 2005 study years. In some data tables involving frequency distributions, a chi-square test was used to qualify significance. Our tests were conducted with an alpha level of 0.10, which in common terminology means that when we indicate a significant difference, we are right nine out of ten times, on average.  In many of the data tables, we indicate significance across segmentation groups with a single asterisk (*), and significance across the 2003 and 2005 study years with a double asterisk (**). These markings can assist the reader in identifying the statistically significant trends in the data tables of this report.

About the Authors.  Drs. Tom and Tim Prince, formerly of The Ohio State University, are brothers and co-founders of Prince & Prince, Inc., a leading marketing research specialist in the floral and green plant industries. Prince & Prince has completed more than 50 major marketing research reports for the floral and floral-related industries in the US, and has also conducted floral marketing research in Canada, the United Kingdom, Holland, Germany, and recently in Spain. They conceptualize, design, and implement market studies and product tests for floral and green-plant suppliers, floral importers, wholesale florists, retail florists, and floral-industry associations. For more information about their specialized marketing research, please contact Prince & Prince, Inc.

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