Prince & Prince Sunday VD report #s don't add up

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This topic contains 16 replies, has 6 voices, and was last updated by  rc 1 year, 9 months ago.

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  • #14066

    rc
    Participant

    Prince & Prince Sunday VD report numbers don’t add up.

    In P&P study they claim about 2% more households will purchase flowers for Valentine’s Day which translates into an estimated $130 million in additional sales. Using these numbers, total floral spending for the holiday should be $6.5 billion, Yet further down in their report they project floral spending for the holiday this year to be $3.3 billion, not $6.5 billion.

    These numbers don’t add up!
    Can anyone explain?

    PP-MarketReport-VD-2016
    http://flowersandcents.com/wp-content/uploads/2016/01/PP-MarketReport-VD-2016.pdf

    #14108

    WillieeArmellini
    Keymaster

    good question I will be sure they see this. Thanks for posting

    #14110

    Study-the-Market
    Participant

    RC . . . in the report . . . Prince & Prince (P&P) is talking about U.S. floral-buying households . . . but not all floral-buying households purchase specifically for Valentine’s Day. . . the following is the P&P analysis.

    P&P estimates 88.6 million U.S. households will purchase floral products in 2016 (deemed floral-buying households – – contact P&P for the derivation of this estimate). Given the trend line in Figure 2 of the report, P&P project about 48% of floral-buying households will purchase for Valentine’s Day in 2016 without the weekend effect (that is 48% of 88.6 million = 42.5 million households). However, with the weekend effect, 50% of floral-buying households (48% + 2%) will purchase for Valentine’s Day in 2016. . . which equates to 44.3 million households. Thus, the difference is about 1.8 million more floral-buying households will purchase with the week-end effect. In a prior P&P report, P&P indicated that the average household floral dollar purchasing for Valentine’s Day was about $74, including all members of the household who make a floral purchase, and including all delivery & service fees. Thus, 1.8 million households x $74 equals slightly more than $130 million.

    The P&P survey is a large random selection of U.S. floral-buying households, as over 98% of survey respondents have made at least one floral purchase over the year (P&P’s definition of a floral-buying household; floral is defined as fresh cut flowers and indoor potted flowering and foliage plants/ planters, NOT outdoor bedding/garden plants, perennials, or landscaping plants).

    Hope this helps to explain the numbers published in the P&P VD Market Report.

    Study

    #14120

    rc
    Participant

    Got it. Thanks for the explanation. (My thought process was if 2%=130m then 100%=6.5b which was an incorrect assumption.)

    I do have an explanation why so many expect a Sunday Valentine’s to be down.

    Even if there are 1.8 million more floral buying households for a Sunday holiday, it doesn’t necessarily mean the increased purchases will take place evenly across all purchasing venues. It’s possible that a Sunday holiday strongly favors grocery stores over traditional florists and even FedExed flowers. So, while mass marketers may see a large increase, florists and the supply chain that services them may see a decline.

    In my business by far the majority of Valentine purchases are for delivery to the workplace. This means Friday, Feb.12th will be the biggest day as most people are off work Saturday and Sunday. A Saturday delivery to the home doesn’t have the same impact because the recipient, usually a woman, can’t make her co-workers envious (big plus impact wise). A Sunday delivery is out of the question at least perception wise because most florists throughout the year don’t make Sunday home deliveries.

    The guy that missed the Friday delivery to the office can have flowers delivered to the home on Saturday (less impact) or pick up flowers Saturday or Sunday. It just so happens Saturday and Sunday are the two biggest grocery shopping days for men, so why not make the easy $15 flower purchase at the grocery rather than the trip to the florist for a $70 purchase.

    #14121

    Study-the-Market
    Participant

    Thanks RC for that detailed explanation.

    If you don’t mind the question . . . would you expect your week-end Valentine’s Day sales this year to be off by 1) less than 10% 2) about 10%, or 3) more than 10%? It would be interesting to compare that with the expectations of the floral mass-marketers for the upcoming Valentine’s Day.

    If I could expound a bit . . . I agree that a weekend Valentine’s Day likely benefits the supermarkets and other floral mass-marketers, compared to traditional florists. At P&P, the consumer household fresh cut and potted plant spending estimates (annually overall) can be segmented by channel, but they cannot be segmented further for each specific floral holiday, event, or occasion throughout the year. . . thus P&P cannot show household cut & potted Valentine’s Day floral dollar spending segmented by channel (e.g. retail florists vs. supermarket vs. super-discounter vs. Internet . . . specifically for Valentine’s Day).

    However, P&P’s latest post on LinkedIn (2-2-2016 – also attached), does suggest a slight “floral market build” for Valentine’s Day among “minimal” floral-buying households (spend $50 or less annually on floral) over the years . . . likely attributable to supermarkets and other floral mass-marketers. While this is considered good news for the floral market overall (building the floral market is a good thing!) . . . what P&P frowns upon is the slight decline in Valentine’s Day floral purchasing among the “heavy” floral buyers over the years (spend more than $250 annually on floral . . . and with a third of this group spending more than $500). . . a slight, but real decline in the incidence of floral purchase for Valentine’s Day. This group of heavy buyers are likely the florists’ best customers.

    Are some of these “big spenders” losing interest in the floral category? . . . are the Valentine’s Day designs not appealing? . . . has the floral industry failed to meet the “big spender” expectations? (but just in a small way!) . . . when floral is seen virtually everywhere . . . is it no longer special? Or is this just a reflection of the consolidation of the florist industry over the years? . . . my personal florist is no longer in business!

    RC . . . although many in the industry are extremely busy right now . . . I am hopeful that after the holiday, there can be some meaningful discussion by the industry of these Valentine’s Day market trends . . . in effect . . . to build the market.

    Study

    #14123

    WillieeArmellini
    Keymaster

    Wow a real discussion, thanks, I miss these

    #14134

    rc
    Participant

    We planned for a 10% increase over last year’s Saturday holiday. Last year’s Saturday holiday was flat from Friday’s the year before. Our yearly revenue over the past several years has been increasing in excess of 10%, so in effect Valentine’s, at least weekend Valentine’s, have not kept pace with overall growth.

    Valentine’s has become an obligatory holiday. The purchaser isn’t purchasing because he loves or understands flowers but rather because he’s expected to. This type of buyer is less knowledgeable and will often take the easiest route in making the purchase, i.e. Proflowers or the grocery store. The flower lover on the other hand may not feel so obligated and would prefer to make his purchase at other times of the year when the perception of price gouging isn’t so high.

    I don’t think it’s easy turning an obligatory Valentine’s buyer into a regular flower lover. He’s only making the purchase because it’s expected of him, and often times he resents the coercion.

    #14175

    Mauricio Gleiser
    Participant

    “I don’t think it’s easy turning an obligatory Valentine’s buyer into a regular flower lover. He’s only making the purchase because it’s expected of him, and often times he resents the coercion”

    RC, I think you are absolutely right on that. From my perspective any obligatory purchase resents the buyer but resentment grows on him and also on the recipient if the gift was more expensive than any other day and proved even less satisfactory.

    The great opportunity is to surprise those who still feel obliged (and their recipients) with a -never seen before freshness/vase life- and then, by next fortnight/month, repeat the offer but at normal(out of holiday) prices.

    That could result in a “pair of regulars”, buying for their own use.

    Just one new regular(the “pair”) out of every 25-30 VD buyers would probably mean doubling your annual sales, not depending at all on weather issues or when VD falls.

    Whatever happens this VD, same strategy should be tried on next Mothers´.
    It worked in UK.

    #14177

    WillieeArmellini
    Keymaster

    This holiday holiday could be a bigger bummer if these predictions are true. There is a lot of old rotated product in the pipeline and as a result there will be some disappointed consumers and that is never good for this business. On the other hand there is also some great fresh product out there as well. Sell the good stuff and make your neighbors happy with the others.

    #14216

    rc
    Participant

    We had a small increase in the number of units sold, however sales were flat for the week compared to last year. This year we intentionally sold at a lower price point and did not raise our delivery fee as we have done in previous years.

    As suggested by Study-the-Market trying to get a conversation started if anyone is interested.

    #14217

    WillieeArmellini
    Keymaster

    RC, as always thanks for your input and I hope others will respond.

    Sounds like you played it safe and as a result did not mess up you holiday.

    How did you find the quality of product?

    W

    #14220

    rc
    Participant

    The product was excellent, all appeared fresh with zero credits.

    #14223

    Study-the-Market
    Participant

    RC . . . would you happen to know if any of those VD sales were made to “new customers”? . . . The last P&P chart released on LinkedIn shows a general build in VD sales over the years among “Minimal Floral Buyers” . . . P&P’s proxy metric for “new floral buyers” (P&P does not yet have a metric to define a “new floral buyer” in the survey).

    It is likely, however, that much of the floral sales from “minimal buyers” occur at the mass markets . . . but a broad consumer trend may also be shown among traditional floral retailers.

    Would also appreciate hearing from other floral retailers on this topic.

    #14225

    Rumpelstilskin64
    Moderator

    RC, Thanks for your input. Glad to hear that the holiday went well quality wise.

    I would like to ask all of you folks out there, what’s the balance of the holiday? Did Wholesalers sell all their inventories? Was there a lack of product at Supermarket level? Was there product left in coolers at any level of your chain? Were sales higher, equal or lower than prior years?

    Regards,

    Rumpelstilskin

    #14227

    bear
    Participant

    Sales flat to last year, but overall we’re happy with that – we bought more conservatively this year so it worked out better overall. I don’t care for weekend holidays, less consistent and harder to predict what will happen with sales.
    Quality as a whole was very good, with the exception of one rose grower that resulted in a large credit – plainly trying to flush old product out, terrible stuff.
    Bear

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