New Competition Budding in the Florist Trade

Helen and Marty Shih have borrowed a page from the operations manuals of such giants of standardization as McDonald’s and Ford Motor Co. for their relatively small business.

But instead of Big Macs or Mustangs, the sister-brother team turns out flower arrangements. Lots of them. About 375 a day, in fact, in a limited number of styles put together by a six-person assembly line.

And with the approach of Valentine’s Day, one of the biggest flower-giving holidays of the year, production has been increased to about 1,000 a day to stock the Shihs’ nine She’s flower shops.

“We cut down labor costs and we can pass the benefit to the customer in lower prices,” said Helen Shih (pronounced SHEE), noting that costs have been pruned 15% to 20% in the seven months since She’s Flowers has been mass-producing arrangements.

The Shihs are not alone in their search for new and better ways to cut costs and bring in more customers, and they reflect the way the flower-selling business is changing.

The florist trade has long been dominated by small, one-shop operations in an industry that has grown to more than 32,000 stores with sales that may top $7 billion this year, according to the Floral Index, a Chicago consulting firm.

But now, fresh-cut flowers and house plants are available in all sorts of places--from street vendors to supermarkets and drugstores. For example, a survey by the Food Marketing Institute found that 56.5% of the nearly 5,500 food stores surveyed in 1985 had a floral and plant department, compared to 19% in 1981.

What’s more, Americans are buying more flowers these days, which creates a blossoming market for entrepreneurs interested in owning a flower shop.

“The flower business is one that’s really flourishing,” said Rocky Pollitz, vice president for industrial relations of Los Angeles-based Telaflora, a flower wire service with 18,000 subscribers. “With our yuppie generation and with more people enjoying the beauties of life, flowers are the easiest way to get a fast thrill,” she said.

As a result of the onslaught, many traditional florists are having to become more savvy marketers to compete.

The Society of American Florists, in a survey last year, found that some consumers avoid going to florists because they are intimidated--they don’t know flower names and are put off by the industry practice of not displaying prices, said Drew Gruenburg, a spokesman for the trade group.

Many florists are responding to customers’ concerns by displaying buckets of loose flowers outside their shops and prominently posting prices and floral names, he said. “More and more flower retailers are, so to speak, taking flowers to the consumer instead of having the customer come in and pick,” Gruenburg said.

One Pennsylvania florist chain has even installed drive-up windows for customers.

“There are people who will buy a few flowers on a regular basis if we can make it convenient for them,” said Ken Royer, who has drive-up windows in three of his 11 Royer’s Flowers shops throughout central Pennsylvania.

Franchising also is increasing in popularity, Gruenburg said. The apparent leader among flower-shop franchisers is Conroy’s of Culver City, which has 75 shops primarily in Southern California.

A Conroy’s franchise gives owners access to the company’s expertise in finding locations and controlling costs, and opens up a secure source of supply through Melridge Inc., a flower wholesaler that is about to buy part of Conroy’s, said President Carter Miller. Conroy’s also provides a “menu” of kits to reproduce a variety of floral arrangements that are standard from store to store.

“We are a large enough and a successful enough operation that we have that as a drawing card,” Miller said.

Growing flower sales have been paced by more store openings and, to some extent, by the failure of inexperienced operators, Pollitz said. “To open a flower shop, one does not need as vast amount of money as, say, if you were going into a computer business, so people think it’s easier,” she said.

Florists tend to disregard any possible new competitive threat from supermarkets and others. Such outlets attract impulse buyers and educate them, creating future customers for florists, they say.