Relay reality …. Time to take control

Int blog headerDespite the headlines in the American press, the chances of Interflora (owned by FTD) going bust are unlikely.

Yes the latest disclosures are showing another, even louder picture of doom;  yes the company is seemingly in trouble and shares are in freefall and yes they are losing sales at an alarming rate. 

However, with a predicted $1billion turnover for the year, there is still a lot going on, there are still areas in the mix that are doing well (or not as badly) and I suspect there are some very juicy nuggets amongst the rubble that will appeal to possible buyers/investors.

As such anyone; be it florist or other corporate player, who is jumping up and down saying “hurrah, hurrah the witch is dead” is wrong.  

You see I suspect this is just the beginning of a process.  FTD have till June 1st to get their house in order ... or should that be ducks in a row.  Because it wouldn’t surprise me that if there isn’t already a plan in place, there soon will be; I suspect it will probably involve filing for Chapter 11 (which effectively puts the company into a holding position) at which point the good bits will be hived off and sold and the bad dumped.  It's what happens in big businesses when they get into trouble; they get picked up for a song and reinvented  - look at House of Fraser, Mothercare et al.

Add in the changes that have - and are happening in the UK at very short notice;  like the sudden dropping of couriered items (a whole other story), introduction of ‘super florists’ that have left other members reeling as they stand to lose hundreds of orders and the launch of some even higher commission items into the collection and it all seems mighty peculiar to me and a situation that will only fully unfold over the coming weeks.

As always I shall monitor, investigate and report back if necessary.  However please remember the following:

1:  All relay and quasi relay*2 companies in the world are reliant on independent retail florists to fulfil orders in order to either generate commission and membership fees or buy other services. Without florists their business models are challenged – independent florists have bargaining tools and should not be afraid to use them.  Tis a misnomer that you need them more than they need you. Consumers are getting more savvy, the mighty Google makes finding a florist easy.  Gone are the days when relay was the only way to generate sales.

2:  None of these companies carry any risk in terms of stock, staff, rent, rates, insurance, transport etc etc.  Yes the companies have to invest in technology and marketing but it is florists who carry every risk to make the sale happen without any guarantee of repayment or order numbers.  Florist effectively supply the vital infra structure at no charge – indeed pay for everything.  That should not be forgotten or the value underestimated.

3:  If your business relies on 3rd party generated orders so much you cannot afford to turn off your terminal/website/order point then you should seriously question if you have a viable business.  If a shop can’t be self-supporting via the population in its own area (be it for self-purchase or gift deliveries in and out of the area generated via your own website) you need to think twice.

What is happening in FTD/Interflora is scary, sad and potentially damaging.  It is also a reminder that the world of flower retailing is changing and not always to the benefit of independent florists.  Those that have moved with the times can and will survive; I just don’t think it will be everyone and actually don’t think it should be.  The success of the independent sector should be determined by quality not quantity.

**1 Great hoo hah has been made by Interflora that they have ceased all courier/drop ship/centrally made orders in order to both create a point of difference between them and the likes of Moonpig, M&S etc and push more orders back to their members.   We do not belive it is that clear cut and will investigate further.

**2  Relay and quasi relay companies are those who either 1:  generate their revenue via classic membership and/or commission/transaction fees (i.e. Floom, Bloomnation, eFlorist, D2F, Interflora, FTD, 1800, Fleurop, FloraQueen, Florist Exchange et al) OR 2:  companies who offer a free order transfer service/order generator functionality as part of another money generating service i.e. Florist Window and Florismart's new platform.