Flora-Stats Annual Report 1999
Fresh Cut Flowers
The year started off relatively well for this product segment, posting year-to-year demand gains last fall. However, the number of purchases has slipped each quarter since. Spending held close to year-ago levels as customers spent more on each cut flower purchase. The average purchase size grew at a double-digit rate during the first half of the crop year. By year-end, transactional spending moderated, holding close to year-ago levels. As a result, the crop year ended with total expenditures for the cut flower segment consistent with 1998.
The key issue is one of an eroding buyer base. Fewer households are buying fresh cut flowers than in past years. Further contributing to the decline was a cutback in how often customers purchased fresh cut flowers.
Over the past couple of crop years, consumers have been less inclined to buy fresh cut flowers as a gift, with fewer being bought for "romantic" or "traditional" reasons. Separately, cut flower customers cited convenience and price as the most important factors when choosing where to make their purchases. Consumers typically purchase these products at either the Supermarket or at a Florist Shop. These two channels support about three-fourths of all purchases (transactions).
During the Ô99 crop year, Florist Shops were responsible for two out of every three lost cut flower transactions. The number of purchases fell at Supermarkets as well, but not at the same rate as noted at Florist Shops. Therefore, Supermarkets gained share standing this year.
Beginning in January Ô98, the study began tracking consumer purchases made through the Internet - as a way of purchasing, not as an outlet type. We do not have a full two years available to compare at this point. However, with the information currently available, consumers are increasingly making their fresh cut flower purchases through the Internet, The vast majority of these purchases are for arranged fresh cut flowers. It still represents a relatively small share of total purchases, but it is undoubtedly going to capture a greater share of buying in the future.
Artificial/Dried Products
The artificial/dried category outperformed the market overall although buying was still below that from a year ago. Within this segment, the weakness traced primarily to customers cutting back their buying of dried floral items.
Buying of these items center around Discount Chains and Craft/Hobby stores. In 1999, Discount Chains captured one-third of all category purchases, though their importance slipped compared to the Ô98 crop year. At the same time, the share held by home Centers also fell.
Price and selection are key drivers when deciding where to buy artificial/dried products. However, it was convenience and other reasons behind the categoryÕs soft trend this year.
