Consumers are increasingly opting to purchase flowers from alternative retailers, hurting the industry.
New York, NY (PRWEB) May 28, 2014
The Florists industry has wilted over the five years to 2014. Consumers are increasingly opting to purchase flowers from retailers that are not included in the Florists industry, such as e-commerce stores (IBISWorld report 45411aCA) and supermarkets (report 44511CA) due to their added convenience and lower prices. Furthermore, flower sales fluctuated considerably, as consumers felt uncertain about the economy; many operators were unable to accurately manage their stock and forced to sell at a loss. Outside competition from supermarkets and online stores, coupled with volatile consumer confidence, is anticipated to reduce revenue at an average annual rate during the period, with a drop expected in 2014.
As e-commerce stores and supermarkets siphon industry demand, many florists have been forced to close shop. Supermarkets and e-commerce stores benefit from lower per unit overhead costs, allowing them to offer flowers at a lower price than florists. Furthermore, according to IBISWorld Industry Analyst Britanny Carter, “Consumers can purchase flowers along with their groceries or from their computer, providing an added convenience relative to traditional florist shops.” While florists typically offer superior floral arrangements, “Younger consumers prefer to purchase flowers on the basis of price and convenience, rather than quality,” says Carter. In response to poor demand conditions, the number of enterprises is expected to decline over the five years to 2014.
The Florists industry is highly fragmented, with no industry player accounting for a notable percentage of industry revenue. Revenue declines are expected to slow to an annualized rate over the five years to 2019. Consumer confidence is forecast to increase steadily and stabilize demand relative to the five years prior, allowing florists to more accurately manage stock and improve profit margins. While outside retailers will continue to cut into industry revenue, many florists will increase their range of price premium, creative flower arrangements in order to differentiate themselves from outside retailers. Furthermore, strong marketing efforts to promote locally grown products will encourage florists to use locally grown flowers in their arrangements. Florists will also increasingly leverage online platforms to connect with customers and promote their products.
For more information, visit IBISWorld’s Florists in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry retails cut flowers, floral arrangements and potted plants. Industry operators purchase these goods from domestic and international flower farms and wholesalers and then sell them to the general public. This industry excludes e-commerce and mail-order florists.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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