Hallmark Cards and Martha Stewart Omnimedia are just two companies aiming to leverage established brands into the $15 billion floral market. Just as consumers have gotten used to stickers that now label once generic bananas "Chiquita" and oranges "Sunkist," these floral retailing newcomers hope a nationally known name will cultivate sales of labeled bouquets.
In late fall, Hallmark quietly kicked off its floral delivery service in five test markets including Albany, N.Y.; Charlotte, N.C.; and Portland, Ore., with ads from Messner Vetere Berger McNamee Schemetterer/Euro RSCG, New York. Meanwhile, Martha Stewart debuted Marthasflowers through the company's Web site and Martha by Mail catalog in time for Christmas.
Not to be outdone in the floral name game, well-known produce marketers Sunkist Growers with its Sunkist brand and Dole Food Co. with Dole have extended their names in the last year by licensing their brands for use on supermarket-distributed flowers.
These more widely recognized brands make their entrance as newcomer florist chain Gerald Stevens Inc., Fort Lauderdale, Fla., is buying up established local florists and using that local power along with a new Yellow Pages agency-Wahlstrom & Co., Stamford, Conn.-to establish a national presence. Gerald Stevens Chief Marketing Officer Eleanor Callison said she expects the company's 300-plus outlets-which currently operate under different names-to have a single Gerald Stevens brand identity within the next few years. Until recently, Ms. Callison was senior VP-advertising at Hallmark, now a Gerald Stevens rival.
Floral delivery is a natural outgrowth for the likes of Martha Stewart and Hallmark, which have built their companies around celebrations, gifts and hospitality.
"We're in a good position since this is an extension of the brand," said Martha Stewart Omnimedia President-Chief Operating Officer Sharon Patrick: "We can grow it slowly and steadily."
Even competitor Ms. Callison agreed: "It's brand leverage, it makes all the sense in the world," she said. "Brands matter, which is what allows a Martha or a Hallmark to get into a business that's complex and have credibility."
CALYX & COROLLA
For now, Gerald Stevens first branding efforts concentrate on its upscale floral division, Calyx & Corolla which tapped Jericho Communications, New York, earlier this month to handle advertising and public relations. Gerald Stevens also is expected to make a move into supermarkets by the end of this quarter.
These companies are edging into a market that is both fragmented and growing slowly. Retail floral sales in the U.S. were $14 billion in 1997, and increased to $14.6 billion for 1998, according to the Society of American Florists. For 1999, sales are predicted to reach $15 billion.
The majority of those dollars, however, passed through the neighborhood flower shop. Already established national brands such as FTD/Florists' Transworld Delivery and 1-800-Flowers.com account for less than 10% of the market, according to 1999 figures from the Floral Marketing Association.
FTD and 1-800-Flowers work as brokers, taking orders and a percentage of sales sent to a local retailer. With e-commerce budding, FTD and 1-800-Flowers have begun to dabble in direct sales of their own through ftd.com and 1800flowers.com, but it's a small part of their overall operations. Other Internet sites in this arena include proflowers.com and garden.com.
Internet tracking service Forrester Research predicts the online floral industry will have sales of $354 million for 1999, up 67% from an estimated $212 million the year earlier. Forrester forecasts 2003 sales will bloom to $2.2 billion.
Floral marketers want to promote flower-giving as an any-day occurrence, not just for holidays. Martha Stewart's Martha by Mail encourages consumers to "treat yourself, or surprise someone special with fresh flowers throughout the year."
Americans increasingly are embracing a better quality of life, which includes buying flowers for themselves as well as for friends or family, said Tom Eley, director of sales and marketing at 1-800-Flowers.com.
"In Europe, flowers are much more a part of everyday life. You'll see that more and more here," he predicted.
Flower industry executives credit the booming economy for the increase in professional and personal flower purchases. But the influx of newcomers armed with marketing budgets, they hope, will fertilize the entire industry.
A SALES UPTICK?
"We've pretty much viewed sales as flat over the last few years," said Peter Moran, exec VP-CEO of the Society of American Florists. "Part of that is we really don't have a category carrier, like a Microsoft or Procter & Gamble. We know from research that consumers are predisposed to buy flowers, but they don't get enough messages reminding them to buy."
As competition heats up from better known names, Ms. Callison said she believes Gerald Stevens can hold its own in the increasingly crowded floral market.
"We don't have the brand name yet," she said, "but we do have the floral experience."
Contributing: Ann-Christine Diaz.