B2B Payments

How Digital Platforms Are Revolutionizing The $100B Flower Biz

There are worse ways to start a business than what happened when John Tabis was getting direct-to-consumer and subscription flower operation The Bouqs off the ground.

As the story goes — the story he told to Karen Webster for the latest edition of the PYMNTS Matchmakers podcast series — Tabis, the CEO and co-founder of the firm, was testing its fulfillment capabilities by having flowers sent from South American suppliers to his wife at their house.

 

“The deliveries would come over and over again,” he said. The tests took months before significant progress was made. Getting flower commerce right in this world of thousands of other providers is not easy — especially when The Bouqs aims to stand out from that crowded field by offering sustainable products and a transparent supply chain. However, it’s not as though his wife was unhappy. Unless one has allergies, it’s hard to nurse an active dislike of flowers, after all.

Motivating Factors

The story of The Bouqs is the story of trying to disrupt a well-established industry that consumers are used to dealing with, either via the local brick-and-mortar florist or the seemingly endless online choices for flower deliveries, including last-minute orders.

Two significant factors motivated Tabis to dive into this business.

First, it was an understanding about flower growers — including the company co-founder, who is a biochemist who runs a growing operation in Ecuador (that country and Columbia are global powerhouses for flower supply). “The farmers often get the short end of the stick,” Tabis told Webster. Not only that, but consumers often come away from buying flowers with a sense of being ripped off on pricing. “An order costing $19.99 would end up costing $79 (at checkout),” he said, commenting upon one of the most frustrating sources of friction in this area of commerce.

As he told Webster, he figured he and his co-founder could do better by supplying product direct from the source; offer more transparency about supply and pricing; promote sustainability with their products; use technology to reduce friction and bring more efficiency to the entire process; and partner with FedEx, smaller delivery providers and even local couriers to get those items to consumers. That contrasts with the standard model of taking an online order and them routing it to the nearest local florist. “We vertically integrate all that and deal with only one player — us — instead of all those different players,” he said.

It’s not the last-mile delivery that’s the main problem — as Tabis told it, he sees the challenge more as a 3,000-mile problem. Moreover, that means payments is a big part of that, of course — along those 3,000 miles a company must organize payments among multiple players, and players who are often accustomed to dealing with cash and paper-based transactions.

The company is also playing in one of the hottest areas of retail, and a space unique for the flower business — subscription commerce. After all, flowers are not just for special events. Some consumers prefer to have regular fresh deliveries too. So that, of course, means solving for recurring payments as well.

Tech Push

Indeed, Tabis said during the Matchmakers interview, that he views The Bouqs as a tech company more than anything else — an echo of what Jeff Bezos has said about Amazon. That tech enables The Bouqs to deal with — and overcome — the many, many challenges of getting fresh, competitively priced flowers from its network of some 140 farms and past customs and into the hands of U.S. consumers — who collectively spend some $18 billion a year on flowers. “We had to figure out how to scale all that and make it really large,” he said. “We spent about nine months getting to the first version we launched with.”

The overall $100 billion global flower industry — despite all those eCommerce platforms — is not exactly the most tech-heavy space in retail. That’s because you are dealing with farms, and in general, agriculture lags most other industries when it comes to using much of the tech now standard in the payments and commerce spaces. The use of tech is one way that Tabis said his company could stand out and make a real push for more market share.

The other way is sustainability, and all that comes with that. Many consumers may scoff at the idea of wanting to know where your flowers come from and being assured that those items are the product of sustainable agriculture operations. So while the concept of sustainability has indeed taken hold in the grocery industry, Tabis said, that is not the case with flowers. However, things are changing, and the way Tabis told it to Webster, he intends to capitalize on those shifting trends.

“Once customers become consciously aware (of sustainability) and why it matters,” he said, then we find we get a disproportionate percentage of them who come back and purchase again.” Moreover, that’s not the only factor involved, either. “Nowadays, there is a consciousness in the consumer base (about sustainability), especially in millennials and post-millennials. Eventually, this will be a table stakes factor. That is where the world is headed.”

What’s next for The Bouqs, then? Well, for now, flowers are the focus — not cards, not candies, not the little toys and other gifts that often come with flower deliveries. “It will have to be the right time and the right place for us to dive into those areas,” he said.

After all, flowers are still in huge demand among consumers, and likely will be even as consumer attitudes shift.

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