How Flower Wire Services Work
Have you ever wondered how arrangements get delivered thousands of miles away in just a few hours?
For more than 90 years, the primary method of placing a flower order for delivery in a distant city has been to contact a local florist who then transfers your order to a qualified affilated flower shop near your friend, family member or business acquaintance. It's still a great way to send a floral gift because your local florist may know your likes and dislikes and can provide thorough explanations of available styles, general price ranges and information about seasonal products. He or she may network with other professionals on a national or international basis and may even personally know great local florists in the cities where your orders are to be delivered.
What Wire Services Do
Prior to the mid '90s, wire service clearinghouses were primarily focused on qualifying members, maintaining standards, facilitating the transfer of orders and payments between florists, and providing national marketing. They still provide those functions but have added the direct selling to consumers, by themselves and their non-florist affiliates, to their service mix. Their primary goal now is to drive consumers directly to their call centers and websites, instead of local flower shops.
Florist-members are indepedently owned and operated companies, typically small family-owned businesses with annual gross sales of approximately $300,000. In general, their primary focus is to serve the local communties by providing timely fresh arrangements, plants and related gifts for a variety of occasions. The wire services provide the networks for these independent shops and facilitate the transfer of orders nationally and internationally, allowing for a seamless, speedy method of delivery of fresh flowers around the world.
All Those Pretty Pictures of Arrangements
Consumers may find it interesting to know that the array of products found in a wire-service-provided photo album or via a national website is called a selection gu ide and not a catalog. Why? 'Catalog' implies that the products will be delivered exactly as shown. This gallery of images is really intended to be a style guide to visually assist customers while choosing an appropriate color scheme, theme, size and style. With hundreds of designs featured in these marketing tools, very few (if any) florists maintain the flower, foliage, container and accessory inventories needed to fill all these orders exactly as shown on short notice - hence the myriad of disclaimers found on flower-selling websites and related print advertising.
Filling florists do have an obligation to make necessary substitutions with flowers and containers of similar character and equal or greater value to the items pictured. They may also refuse to fill a wire-in order entirely if the price paid is below their local price including delivery, or if they do not have the appropriate inventory to properly fill the design in a manner acceptable to the wire service rules. From the information provided in the Consumer Reports article, it appears their staff found the substitution of pink spray roses (multiple smaller roses on single stems) for standard roses as unacceptable. The Florist Detectives believes this type of substitution may be permitted under some current wire service rules.
Many websites now have a check box on the ordering page to indicate that no substitution is permitted. By selecting this box, consumers can be more assured that substution of flowers and/or containers will not occur. It also may mean that their orders cannot be delivered in a timely fashion if the wire services or selling affiliates are unable to find local members with the specific products at the prices indicated, especially in rural areas. The gifts may not arrive in time for those special occasion so selecting 'no substitution' isn't always advantageous.
What and How Arrangements Are Sold
For many years, wire service members were not permitted to advertise outside their immediate delivery areas. Even today, one of the national companies has a rule which states:
No member can use the licensed XXX marks in any advertisement that circulates substantially in areas outside of his or her shop's normal delivery area unless the advertisement contains contains a clear, conspicuous and prominent statement (our emphasis) of the shop's name and actual city and state location.
This rule seems to be unevenly enforced both on the web and in print.
Members used to be required to itemize all elements of wired-out orders - the flowers, local delivery charges and service fees (if any). Services fees were permitted to be no more than the actual cost of transferring an order - bascially covered the price of the phone call to the fulfilling shop.
Selling florists were trained to explain that inventory would vary from shop to shop so requesting specific arrangements was primarily limited to a few nationally advertised specials. In general, most florists used the selection guides to assist consumers in choosing styles, and left the final decision on arrangement content to the filling florist - trusting them to represent both themselves and the customers well. It was common for orders to contain general descriptions about containers (in a basket, in a vase), colors (bright and spring, soft and pastel) and styles (contemporary, traditional, garden-style.) Filling florists could then use their current inventories to create timely and appropriate floral gifts. A well made and delivered order often meant a new local customer... who would then purchase locally and use that shop for sending orders out of town.
Do selection guide images on the web make the purchasing experience easier for customers? Do they also lead to consumers misunderstanding the nature of what they are purchasing, despite the myriad disclaimers? In our opinion, the answer to both questions is a resounding 'yes'!
An Unsustainable Fee Structure
The direct selling of florist-delivered products by non-florists has had a substantial negative impact on the traditional retail florist trade. Latest US Census Bureau statistics indicate the number of retail flower shops shrank by nearly 14% from 1997 to 2002. Commission structures, created when the networks were open to full-service florists only, have created an imbalance that continues to weaken the sector with more than one third of all wire orders now being sold by 'broker/order gatherers'. The commission schedules, established when florists had to both sell and fill orders, allowed shops to offset fulfillment expenses with sales commissions.
When Consumer Reports tested online florists, they commented about the lack of low-priced floral products on some of the sites. The magazine had no way of knowing that the FTD and Teleflora members only received approximately $20.90 to design and deliver those $30 flower orders, with FTD and Teleflora both now keeping approximately $20.05 (27% commissions on the price of the flowers and delivery, a $1.00 processing fee paid by the florist, and the $10.95 service charge paid by the consumer.) 1-800-Flowers affiliates received approximately $21.30 for those $30 orders, with the company keeping approximately $18.65 including the $9.95 service fee paid to process the order.
Is there any wonder why few 'under $30 arrangements' are available through these national companies? With the cost of products, staffs, vehicles, insurance, gasoline and operating expenses, few florists are willing to make and deliver these arrangements at such low levels of compensation, especially in metro areas. And especially when the florists know that the customers paid approximately $40 for modest gifts worth typically less than $25 after local delivery charges are deducted. Consumer complaints about these orders often begin with the phrase "I paid more than $40 and only got..."
In addition to the commissions, the national wire services also collect substantial fees from florists for a wide range of services. Publicly available financial statements show the value of this income to their bottom lines, but with the rapid decline in the number of shops, the Florist Detectives believes these profits will see erosion going forward.
Why do florists maintain memberships in these organizations? In our opinion, most still see a need to use the networks for worldwide transfer of orders from their local customers, but as fees increase and deceptive affiliates abound, more and more well-known shops have refused to fill orders sold be these national companies and their non-florist affiliates. They are also opting to directly contract with florists outside the traditional networks. We believe this trend will continue to gain momentum.
Bypassing the Wire Services
More and more consumers are also understanding the value of placing orders direct with the local flower shops that will design and deliver their bouquets. Today, the web has opened the doors of local florists to consumers from all over the world. If only shoppers could easily determine the real florists from the affiliates pretending to be located in their towns.