Holiday Spending Predictions: Cautiously Optimistic

Sales figures from the days immediately following Thanksgiving seem to indicate that spending is up from last year, although all retailers are not benefiting equally from the trend. Here's a rundown of reports from different news agencies:

Black Friday Spending up by Nearly 20 Percent.  Americans spent an average of $360.15 per person last weekend, some 19 percent more than on the weekend after Thanksgiving in 2005, according to the National Retail Federation (NRF), as reported by Advertising Age. Store traffic, however, was down at many places, dropping by double digits at discount stores, including Wal-Mart, to 49.6 percent of shoppers compared to 60.7 percent in 2005. Online, sales on Black Friday grew to an average of $82 per consumer, up from $70.80 in 2005. "Consumers are more purposely shopping," Gary Drenik, an analyst with Columbus-based Big Research, told Advertising Age. "There's less this mentality of 'I've got to go out and shop 15 different places in one day.' This year, many went to only a handful of stores instead."

Customers Click, Buy on 'Cyber Monday.' At press time, analysts were optimistic about sales returns for the Monday after Thanksgiving -- dubbed "Cyber Monday" by the media -- when many shoppers, stuck behind a desk at work, go online for deals. ComScore, which excludes travel, auctions and corporate purchases in its results, expected online sales Monday to increase by at least 24 percent to $599 million, from $484 million a year ago, according to the Associated Press (AP). "It is a very promotional holiday shopping season," Scott Silverman, executive director of Shop.org, said to the AP. "Many are using today as the platform to launch promotions."

Despite an announcement Saturday by Wal-Mart Stores Inc. that November's same-store sales would be "more disappointing than expected," many analysts are "are expecting a robust holiday season for stores and in cyberspace, although the growth in business will be slower than a year ago," according to the AP. The NRF expects total sales for the November and December period to be up by 5 percent, compared to the 6.1 percent pace in 2005. Jupiter Research is predicting an 18 percent increase for online sales (to $32 billion). Last year, online sales increased 23 percent.

--Mary Westbrook
mwestbrook@safnow.org

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Ecuador's New President Opposes FTA

A U.S.-trained economist opposed to a free trade agreement with the United States appears to have been elected Ecuador's eighth president in a decade.

As of Nov. 28, with nearly all of the ballots counted, Rafael Correa lead his opponent, Alavaro Noboa, by nearly 40 percentage points. 

During his campaign, Correa has been critical of U.S. influence in Ecuador and the entire Andean region, and has said he would reject a planned U.S./Andean Free Trade Agreement (FTA). 

President-elect Correa's position on the proposed FTA could have consequences for the floral industry. A U.S./Andean FTA would provide permanent duty-free status for flowers exported to the United States from the four Andean nations of Colombia, Ecuador, Bolivia and Peru.
 
FTAs between the United States and Colombia and Peru have been negotiated and signed, and are awaiting congressional approval. But in the new Congress, approval of at least the U.S./Colombian FTA may come slowly since some Democrats have suggested the agreement's labor provisions should be renegotiated.

An FTA with Ecuador has been put on hold after the Ecuadorian government last summer seized assets of Occidental Petroleum's operation in Ecuador.

Correa's election also comes at a critical time during the debate over extending the Andean Trade Preference and Drug Eradication Act (ATPADEA) beyond its expiration date of Dec. 31.  The ATPADEA provides duty-free status for flowers coming into the United States from Colombia, Ecuador, Bolivia and Peru but must be renewed every five years. If it is not renewed or extended past Dec. 31, U.S. importers of record will have to pay duties on flowers from those four nations.

Even if the ATPADEA is renewed, there is a chance Ecuador may be excluded due to Correa's election and existing tensions between the United States and Ecuador, leaving importers of record to pay duties on Ecuadorian flowers.  
  
In general, House and Senate lawmakers support an ATPADEA extension, but passing legislation is uncertain in the last few days of the lame duck session.

                     
--Drew Gruenburg
dgruenburg@safnow.org

 
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DFG Expands its Reach

The Dutch Flower Group (DFG), a cut flower and plant exporter comprised of nearly 30 independent operating companies, recently added another group to its fold. Blumex USA announced in mid-November that it was joining DFG and would begin operating as the American Flower Group (AFG).

"The Blumex USA management was looking for a new challenge, and strategically it fits well into the DFG," says Marco van Zijverden, CEO of DFG. "AFG is sourcing from all parts of the world, even local (U.S.) grown products... Because of the size of AFG, they can buy and import in big volumes, do the breakdown at the facilities they have at the airport and provide customers with good quality products against a very competitive price."

By making use of the DFG grower network, AFG will be able to source more efficiently and give customers access to production from Kenya, Zimbabwe and South Africa, van Zijverden says.

"(AFG has) a very extensive network in the USA and can market African products to their customers," he says. "On the other hand, the sales to supermarkets are rapidly growing within AFG. We think that the African products are very interesting for the U.S. supermarkets and via AFG we will be able to serve these mass markets."

The two companies discussed the move for about six months, van Zijverden says. They reached a mutual decision to change AFG's name "to make very clear in the market that Blumex USA is not part of (the Netherlands-based) Blumex NL anymore."

Sales staff at AFG's Miami and New York locations will remain intact. Albert Vink will serve as CEO of AFG, and Cindy McPherson will continue as manager of the Miami office.

--Mary Westbrook
mwestbrook@safnow.org

 
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Boston Globe Reconsiders 'In Lieu of'

SAF received a response from the Boston Globe after sending the newspaper a letter, asking them to reconsider the use of the phrase "in lieu of flowers" in their death notices.  The response from the Boston Globe's chief advertising officer read:

"We received your letter regarding the 'in lieu of flowers' in death notices. We appreciate your taking the time to write expressing your thoughts, and we will provide our sales representatives with guidance on alternative phrases that they can suggest to funeral directors. However, we will not change our policy and will not disallow funeral directors to use the 'in lieu of flowers' in death notices."

While SAF asks newspapers to reconsider its use of the "in lieu of flowers" phrase, in most instances, SAF has found that the problem is often resolved when florists establish personal relationships with local funeral directors. It is important to keep the lines of communication open to discuss and resolve concerns or needs the funeral director may have regarding flowers. Maintaining a positive relationship can make the difference between funeral directors' understanding of the important role flowers play in the bereavement process or their frequent use of the "in lieu of" phrase in obituaries. SAF provides tips to help members work with funeral directors and professional materials to help promote sympathy business to consumers.

Report harmful floral publicity: fax 703-836-8705; jstromann@safnow.org

--Vanessa Machir
vmachir@safnow.org

 
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Wholesalers Show Goes International

Wholesaler Seagroatt Riccardi, Ltd. took the idea of a standard wholesaler's show and added some international flair by hosting the Sanremo Market Design Show at its operation in Latham, N.Y.  The Nov. 8 show featured Italian designers Sabina DiMattia and Marco Mazza, who both own floral businesses in Italy. 

The show is hosted by various U.S. wholesalers three or four times a year in the United States. Seagroatt was chosen to host because "they were interested in Italian product, but hadn't been carrying it," says U.S. Sanremo Flower Market representative Mary Crawford, who organized the event. "It's very important for wholesalers to keep on top of what's going on in the market."

Crawford promoted the show with fliers, and then followed up by sending out invitations to customers with RSVPs. Seagroatt also distributed fliers and put up promotional posters.

The promotion paid off -- more than 350 attendees flocked to the show. "The turnout for this time was at least two times greater (than other shows)" says Mary Guzior of Seagroatt, who attributes the success to the "a new exciting product line that our customers are interested in."

The show, which was free to all attendees, featured imported Italian product from the Sanremo Flower Market, a major exporter of floral products from more than 5,000 small specialty growers, as well as floral design demonstrations. Florist Ann Jordan, AIFD, of Ann Jordan Design Consulting in Naples, Maine, provided commentary for the presentation, and gave creative ideas and sales and marketing tips.

The next day, the presenting designers taught about 20 retailers, selected randomly from guests who registered by Nov. 1, how to make a variety of bouquets.

"It was an investment," Guzior admits of the show, but it was "definitely worth it," she says. "It provided us more exposure." The show wasn't just a success for the wholesaler -- retailer Bonnie Hawley of Hawley's Florist in Rutland, Vt., believes her business could benefit from the show. It "allows us an opportunity to carry things we normally wouldn't be able to carry in autumn," she says, "We were able to get mimosas, which we usually only get in the spring."

View pictures from the show, and some of the bouquets created there.

--Vanessa Machir
vmachir@safnow.org

 
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Texas Poinsettia Celebration on National Radar

An annual celebration at Ellison's Greenhouses in Brenham, Texas, is getting national attention, thanks to word-of-mouth marketing. The company's annual Poinsettia Celebration was featured on The Today Show in a 4-minute segment on Nov. 18. Another, longer story is scheduled to air on NBC sometime soon.

The positive press began after PJ Ellison, AAF, got a call from Jay Gray, an NBC reporter. The network had heard about the company's event, which was featured in Southern Living magazine several years ago, and wanted to send out a camera crew.

"They were all ready to do a happy, feel-good story," Ellison says. "The good news for our industry is that they were awestruck by the beauty (during the) two days of filming." 

Known for its oversized displays of poinsettias in dozens of colors, the Poinsettia Celebration began in 1990 and has been held the weekend before Thanksgiving each year since. This year's event also included a huge poinsettia "Rainbow Tree" with a "pot of gold" at its base.

"Depending on the weather, between 3,000 and 5,000 attend the celebration," Ellison says. "We also get a lot the week before and after that cannot make the weekend.  We will get another 2,000 to 3,000 as a result of the celebration and reputation for poinsettias."

--Mary Westbrook
mwestbrook@safnow.org

 
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JTV Readies for Third Season

JTV is about to kick off its third season, and its creator, J Schwanke, AAF, AIFD, PFCI of JMHS Enterprises in Comstock Park, Mich., couldn't be more excited.

"We make it better everyday," Schwanke says. "We want to keep increasing the user-friendliness, the look of the site and the interactivity."

So what is JTV? Essentially, it's a series of weekly educational videos, delivered online, that focus on a specific floral project. Each episode lasts about 10 to 15 minutes, and there are 13 episodes in a season. The site, which launched in June, is available by subscription ($9.95 a month) and has been supported by about a dozen sponsors. Schwanke, a well-known designer and speaker within the industry, started JTV to reach out to more florists in a cost-effective way.

"It's the new way to stay in touch with what's new and different in the floral industry," he says. "It's difficult to give up your Sunday or weekday night to go to a show that may or may not focus on the information that you want. With JTV, people are there for 10 minutes, and, because episodes are archived, they can watch it as often as they want to."

The formula seems to be working. More than 4,000 specific Internet protocol (IP) addresses are now viewing JTV, Schwanke says. (Each machine connected to the Internet has an IP address, expressed as four numbers separated by dots, for example: 123.45.67.890.) And Schwanke is expanding the site, adding, most recently, an interactive Web log (blog).
"There's a lot of opportunity to build," Schwanke says. "We're just three-and-a-half, four months old. A new member every day -- that's our goal."

Find out more (and check out a free preview episode).

--Mary Westbrook
mwestbrook@safnow.org

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UPS, FedEx Shipping Rates Going Up in 2007

United Parcel Service of America (UPS) recently announced its rates will increase by nearly 5 percent for ground and air shipments originating in the United States.

The rates, set to go into effect Jan. 1, 2007, will be posted on www.ups.com starting Friday. UPS raised its rates by 3.9 percent last year.

The announcement comes on the heels of an announcement by FedEx which is raising its air shipping rates by 3.5 percent starting Jan. 1, 2007. The FedEx increase is the same as last year's.

Before the end of the year, FedEx is expected to announce a hike in its ground rates as well.

Will these increases affect your business? Drop a line to mbarton@safnow.org.

--Mary Ann Barton
mbarton@safnow.org

 
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Florists Keep Businesses on Track with FloraTrac

It didn't take long for Jim Phillip, AAF, and Theresa Morone to start putting their company numbers into the database for FloraTrac, SAF's new market share reporting system. Although their companies are dramatically different in size, they both hope to get something they've never had before -- meaningful comparative data with which to benchmark their businesses.

"We get our own numbers," says Phillip of Phillip's Flowers & Gifts , a 10-store chain based in Westmont, Ill., "but we don't get a chance to look at trends over time in comparison with other operations." FloraTrac will provide month-to-month and year-to-year comparisons of businesses against operations with similar revenues or geographic locations as well as against all program participants. "A lot of florists want this information," he says adding that he plans to encourage all of the companies in his peer group to "get on board."

When it comes to comparative data, size does matter, agrees Morone, a solo operator whose business, Floral Accents in North Tonawanda, N.Y., generates less than $200,000 in annual sales. "When I was developing my business plan and looking up industry reports, the minimum gross sales they had was $250,000....a small start-up business isn't going to do that." It isn't helpful to compare her business with a larger operation, she says "because there are just too many variables....I'm hoping a lot of other shops that are under $200,000 (in sales) are going to participate (in FloraTrac)" so that they all can get realistic comparative data.

Both Malone and Phillip say it was easy to input the data into the FloraTrac system. "The five things they ask for are readily available for most florists," says Phillip. "It's not really hard to do."

For more information, visit www.safnow.org and click on the FloraTrac link under E-Tools.

--Shelley Estersohn
sestersohn@safnow.org

 
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Prepare Now for Wintry Roads

Deliveries can be a bear when it's snowing and sleeting. In Aspen, Colo., this week, the white stuff was falling and Mountain Flowers by Wendy was ready to make deliveries, with snow tires on its Ford Windstar delivery van.

"It's been snowing since yesterday -- it's our first big one of the season," said Mountain Flowers' Adele Potter on Tuesday, when the temperature in Aspen hovered at about 22 degrees.

What can you do to prepare for a wintry mix? E-Brief gathered tips from AAA which predicts that more than 100,000 stranded motorists will call its roadside assistance customer service centers for vehicle extrication services in November and December alone.

"Performing proper vehicle maintenance and good trip planning could keep you from becoming one of these statistics," says John Nielsen, director of AAA's Approved Auto Repair Program.

Here are some of the group's recommendations: 

• Check and inspect a vehicle's ignition system, antifreeze, lights, exhaust, heater, defroster, brakes, tires, windshield wipers and washer fluid, and change the engine oil and filter.

• In addition to performing preventive auto maintenance, carry an emergency roadside kit containing items such as a mobile phone; blankets/sleeping bags; flashlight with extra batteries; first-aid kit; knife; drinking water; high-calorie, non-perishable food; extra clothing; waterproof matches; sack of sand, cat litter or traction mats; shovel; windshield scraper and brush; tool kit; tow rope; battery booster cables; compass and road maps; and emergency flares or reflectors.

Floral Management's December issue explores floral deliveries -- how to make them profitable, what's the best technology and more.

Have any winter driving and/or vehicle maintenance tips you'd like to share? E-mail mbarton@safnow.org.

--Mary Ann Barton
mbarton@safnow.org

 
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Oops!

In our report last week about Delaware Valley's new director of marketing, W. Kurt Schroeder, AAF, AIFD, PFCI, we mangled the name of one of its divisions. The name of its mass-market sector is Fresh Blooms, not Fresh Blends. E-Brief regrets the error.

--Mary Ann Barton
mbarton@safnow.org

 
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Reader Feedback On Deceptive Advertising

N.C. Florists Consider Deceptive Telephone Use Problem, written in the Nov. 15 edition of E-Brief prompted this letter from Roy Sabo, AAF, MCF of Sunnyslope Floral, in Grandville, Michigan:

" ... I see a much bigger problem (than phone book deception) on the internet, which is where more and more shoppers go to place their floral orders ... In our city alone, we have MANY deceptive internet ads -- and sites with links -- that are trying to pass themselves off as local florists. I have actually shopped some of these and ... found that not only the misrepresentation of location is occurring, but some of them are also skimming significant dollars from the orders, in addition to a hefty service fee. Of course, who gets hurt by all of this ultimately? The order gatherers are not affected because they have been hiding behind the "local" area names in which they are advertising. The only "face" consumers have to put on this is legitimate florists.
 
"This internet issue will be even harder to address because it involves interstate commerce and associated federal level laws and policies. State law doesn't govern this type of advertising, from what I've been told. But if we don't start addressing this -- and in a big way -- the order gatherers will become even more daring and blatant.
 
"I think it would be interesting to ask SAF membership to check local Internet advertising to find out how much of a problem they are seeing that affects their local area. I've spent quite a bit of time looking at all the different ways deceptive ads were placed - there are many. Even to me, knowing some of the tricks that are used, it was difficult to determine what was legitimate and what wasn't. And that's what these order gatherers are BANKING on: that it is too hard to track them all down and that nothing can be done about it at the federal level."
 

Editor's Note: We showed Mr. Sabo's comments to Drew Gruenburg, who heads up SAF's government relations efforts and is SAF's chief operating officer. His response: 
 

"SAF has an official policy statement against deceptive marketing practices and, as many members know, has been active in helping florists get legislation passed in their states against deceptive phone listings. The issue is more challenging, however, with regard to the Internet. The FCC makes it clear that it is illegal to deliberately deceive consumers, but there's no mechanism in place to monitor online practices or enforce it.

"SAF's Retail Council recently discussed the issue of online deceptive marketing practices and recommended a subcommittee be formed to look at the issue more. A lot of it may boil down to differentiating deceptive advertising from what is simply aggressive -- but not deceptive -- marketing. So this task force will clarify the concerns and determine what, if anything, can be done about the truly deceptive practices. They'll also brainstorm potential positive measures and strategies retail florists can employ to deal with the practice and build local market share."

 
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Product Spotlight: SAF's Ultimate Floral Industry Supply Guide

Are you having trouble finding some of the unique containers and gift items your customers want this holiday season? Look no further ... SAF's Ultimate Floral Industry Supply Guide can help. SAF's online search engine does "Google" one better by helping you target floral-specific products. You'll find expanded listings for floral wholesalers and suppliers, as well as other companies that provide the products and services you need to satisfy your customers.

Go to www.safnow.org and click on the link under E-Tools.

Also, if you're a supplier and would like to have your products listed on a targeted site with thousands of potential customers, go to the supply guide site and click on "Add or Edit Your Listing." SAF supplier, grower, and wholesaler members receive a 25 percent discount when purchasing an enhanced listing.

--Vanessa Machir
vmachir@safnow.org

 
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Talk on the Forums

Handling Christmas greens was a popular topic this week on SAF's Online Forum. One member was wondering if there is a "danger" to certain types of flowers when they are stored with Christmas greens. Another member responded that since Christmas greens are not a big producer of ethylene, they should not cause any problems when stored with flowers, assuming that they are stored in a cool place and are pathogen-free.
Read the full discussion.

Other discussions
Phony florists
Delivery prices

Check out the new Educators forum!

Start your own discussion.

--Vanessa Machir
vmachir@safnow.org

 
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Gift Show Attendance

Almost 58 percent of (retailer) readers who responded to last week's e-poll said that they attended a gift show in January 2006. Forty percent of (retailer) readers and 2 percent of (wholesaler) readers said they did not attend.

--Vanessa Machir
vmachir@safnow.org

 
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Holiday Decor Services

Source: January 2006 Online Zoomerang survey. Based on 315 responses from retail florists with e-mail addresses. Response rate 13%.

--Ira Silvergleit
isilvergleit@safnow.org

 
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