Supermarket floral departments are more than a decorative fixture -- they're profit-producing business operations that can contribute more green to the store than just plants, floral executives and industry observers told SN.
And, though many floral buyers love the softer side of their business, more and more are growing to embrace the hard and fast efficiency principals of category management, they said.
"We can look at flowering plants as a category, and see what percentage it is of our business. Otherwise, you can waste your space," said Lauree Lincoln, floral sales manager for Big Y Food Inc., Springfield, Mass.
Most floral buyers admit there are obstacles to category management in the floral department, due to the myriad variables inherent in any fresh category. A single species may come in several sizes or colors; take up varying amounts of shelf space; or be used in any number of different arrangements.
The constant shifts have made it difficult to implement category management on a wholesale basis, though the pressures resulting from the wave of retailer and even supplier consolidation have made such programs a priority.
"Who in their right mind would allow a floral department that accounts for millions of dollars in sales not to use fact-based decision making?" asked Pam Smith, director of marketing for Nature's Flowers, a Miami-based supplier to supermarket floral departments. "In five years, I think floral directors will be replaced with category managers. I am already seeing it."
Smith and others agree the movement is slowly blooming. "Because floral only does 1% to 2% of total store sales, it has not gotten the attention from the decision makers that other departments get," she said. Yet, Smith observed that floral can yield one of the highest profit margins in the store, with an average ring of $6 to $10.
Despite the promise represented by category management, only about 20% of mass-market floral departments utilize it, according to Tom Lavagetto, president of the Floral Consulting Group, Spokane, Wash. The rest "look at floral more as an image department -- some are managing it like a floral shop and not like a category," agreed a buyer for a Midwestern supermarket chain.
For those actively pursuing category management, one of the first benefits they see comes as a surprise, said Lavagetto. "You may think rose bouquets are selling, and you track the numbers and find that you're actually losing 40%. That type of information can only help the buyer to run the department."
When Big Y's Lincoln started in the floral business, "we used to buy from the gut." Today, however, the benefits of category management have become apparent and there is a real emphasis on utilizing scanner data, she said.
An effective category-management program assists inventory control and ordering by creating an accurate sales database. But for many reasons, this goal is more difficult to obtain in the floral department than other areas, SN was told. The lack of UPC codes, or the use of generic labels, is a prime violator, since there is no differentiation between products. As a result, it becomes difficult to determine how the stems were used -- whether in an arrangement, or with a wrap and bow or as a bunch.
UPC codes recently have made strides towards standardization, through efforts of the Floral Marketing Association (a division of the Newark, Del.-based Produce Marketing Association) and other trade organizations. Lavagetto said the situation has improved and "most vendors are very up to date on providing product with UPC codes." But there are still a large number of smaller suppliers who don't utilize these.
At Food Circus Supermarkets, Middletown, N.J., Betty Massell, floral director and buyer, said there's a sincere effort to implement elements of scanner data capture at her stores. A coordinator for the retailer collects raw numbers and also manages UPC codes for floral items, she said. Some local floral items that may not be UPC coded are still purchased simply to add to the variety of the department.
Donna Shultz, category manager of floral at Ukrop's Super Markets, Richmond, Va., uses pricing guns that put UPC codes on floral products. A prefix identifies the product and the second half of the sequence prices it. But there can still be a 20% discrepancy between what goes in and what goes out, and she calls front-end data collection the hardest part.
"Category management truly does depend on what happens at the front end," agreed Lincoln of Big Y. Cashiers might be rushed and simply key in the price and hit the floral key if UPC codes are not present or don't scan well. Therefore, Lincoln sponsors contests awarding prizes, such as movie tickets, to cashiers at the Big Y store with the least number of hand-rings.
"We use slogans like: 'Before you ring the floral key, see me,"' she said.
"Vendors can UPC everything, but it is an issue whether the front end scans it properly," agreed the Midwestern buyer, noting that cashiers can be tempted to simply multiply by three the first flower bouquet scanned when ringing up a three-for-$10 bouquet order. "There is a lot of opportunity for error in scanning."
Lincoln said another barrier to good data can be on the management end, where implementing detailed UPCs can be seen as extra work.
"I often hear people say they can't load all those UPCs. Everyone loves these generic UPCs, but I don't like them because every four-inch mum isn't the same," she said.
In fact, Lincoln asks that suppliers utilize UPC codes that are also vendor-specific. She estimated that 75% of vendors she works with include the specifications.
"For anybody who uses a vendor-specific UPC, we will report their sell-through to them. We become partners," said Lincoln, adding that it's also a report card on Big Y's selection. "I want to know what brand my consumers are buying. I want to know which grower my consumers vote for with their purchase."
Lincoln thinks that it makes sense for suppliers to support category management, because of the dual benefits. "It guarantees that good suppliers are rewarded, and also if the buyer leaves, there will be a record of how important that supplier is to the chain," she said.
"Vendors and retailers need to be partners," agreed Lavagetto. "Growers need to know what to grow."
At Issaquah, Wash.-based Costco Cos., the retailer-vendor relationship places more responsibility on suppliers to determine the product mix for floral items, according to Lisa Rubio, buyer for the retailer's Eastern division - live goods.
However, the warehouse-store operator needs first to provide suppliers with sales data that tells them how to stock each store.
"We have all of our sales history, and we go by sales history," she said.
Although Costco's cut-flower coolers carry three main offerings -- a rose bouquet priced at $12.99, a mixed bouquet at $9.99 and a growers' bunch at $6.99 -- Rubio said that percentage of total floral sales for each SKU varies by geographic area.
"We sell about half the company's roses on the East Coast," even though the area accounts for only one-third of total stores, she said.