Introduction
Floral industry is a rapidly expanding and dynamic industry in the U.S. As such, it is an industry that is transforming; roles are being redefined, players are altering, and strategies all through the sector are entirely refurbished. Thus, in the context of a market that is rapidly changing, there are inherently players who rise to the top and those who fall to the side. Therefore, capitalizing on opportunities that are emerging while mitigating demanding threats may be the most defining and critical characteristics of players who can thrive in this competitive, expanding, and dynamic floral industry and one way to do this is through conducting a thorough market and competitive analysis.
In this context, market analysis encompasses the study of a target market to understand the characteristics of each segment to know how to better market a product to them. On the other hand, competitor analysis entails an assessment of competitors regarding their strengths and weaknesses within the market, the barriers that may be developed to inhibit competition from entering the market, and any flaws which can be exploited to position products ahead of the competitors. The main aim of marketing is to meet the needs of consumers, and to guarantee success; marketers must have the ability to satisfy the needs of customers better than competitors. On this background, this paper will focus to complete a thorough market and competitive analysis of the floral industry in the U.S. Finally, a concluding paragraph concerning the discussion observation.
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Market Analysis
This part covers a thorough analysis of the targeted customers that I want to attract in my floral business. In that context, my primary target customers will be Generation Y (millennials), Generation X, and baby boomers. According to Russell Research (2016), these are the three main categories of floral consumers in the U.S., and these consumers have some common characteristics concerning flowers. These common features include showing a strong appreciation for flowers and buy flowers as gifts at florists. However, there are also distinctive characteristics among the segments. Yue, Zhao, and Rihn (2016) define Generation Y to consist of 71 million persons born between 1977 and 1994 (age range between 20 to 38 years old). These individuals are of interest to most industries because they are entering the work market, finishing college, and have higher purchasing power than the previous years.
This generation is the segment who have a higher tendency of buying flowers on impulse and values convenience when shopping for flowers. They also buy flowers to uplift their emotions to feel better, for a date, to freshening, perceive flowers as stylish gifts, and find it significant for local florists to have 24/7 availability (Russell Research, 2016). Besides, they perceive floral products to be expensive, and traditional gifts hence flowers are not part of their top choices for gifts. Additionally, they are highly tech-savvy and are resistant to conventional marketing strategies; thus, social media such as Facebook, YouTube, and Instagram remains the most convenient platforms for marketing to them. They also like socializing through coffee dates, fun travelling among others (Yue, Zhao, & Rihn, 2016).
Generation X on the other hand, consist of people born between 1965 to 1978. This generation is most likely to use local florists, require convenience like delivery options, and has the highest tendency of buying flowers for anniversaries (Russell Research, 2016). Families and friends are the most preferred way of receiving trends and information about flowers, followed by TV, social media, email, discussion with florists, online news outlet, and national magazines. Additionally, this segment believes the flower color adds impact to a gift, purchase flowers for occasions, and find it very essential for local florists to provide exciting styles or designs which make an impact (Russell Research, 2016).
Baby Boomers consists of individuals born in 1946 to 1964. This generation believes they flowers and have a higher tendency of buying flowers for funerals and birthday more than other generations (Russell Research, 2016). Family and friends are their most preferred way of receiving trends and information about flowers, followed by TV, discussion with florists, magazines, and newspapers. Believe that giving flowers as gifts is traditional, tasteful and caring, and cite flowers as too expensive and not lasting longer as their barriers to purchase. Also, they find it important for very significant for local florists to provide freshness and flower quality (Russell Research, 2016).
Competitive Analysis
Floral industry is highly competitive and dynamic. According to Ibisworld.com. (2017), the U.S. floral industry displays minimal entry barriers, with low costs of upstart and no precise licensing required. Many of the establishments function as non-employers, and the retail outlet establishing capital costs are not substantial relative to most other retail industries like department stores. However, the high competition level and market saturation prove challenging to new entrants in the floral industry. Many of the operators in the U.S. floral industry are medium-size and small-size establishments such as supermarkets, local florists, and nursery and garden stores, plant among others, which cater to the local people. As a result, the industry has a very high establishment number totaling to 33, 435 in 2017 (Ibisworld.com, 2017).
The florists' industry major products include arranged cut flowers, potted plants, giftware, unarranged cut flowers and others, and purchase these goods from international or domestic wholesalers and flower firms and sell them to the general public. The industry also market their products mainly to confectionery wholesaling, funeral homes, hospitals, wedding services, greeting cards and other publishing, nursery and flower stock wholesaling, and plant and flower growing (Ibisworld.com, 2017). The significant strengths in the florists' industry which act as their success factors include effective quality control, the ability to regulate stock on hand since floral products are perishable, and the ability to entice local patronage/support. The industry uses these factors as a competitive advantage to market their products for the success of their business (Ibisworld.com, 2017).
Additionally, the industry faces some of the threats such as entrant of new competitors and network switching from florists to flower firms to fulfill orders. Besides, potential entrants also face numerous small hurdles such as barriers of reputation among others. On the other hand, opportunities include high demand for flowers, and attempts by some florists to create a market niche. The weaknesses of the florist industry are that it excludes operators who mainly function as mail-order companies and electronic shopping websites, and also, they charge high prices for flowers and floral products, hence face competition from discounted prices of comparable goods in supermarkets and online. These high costs have led consumers to buy fewer flowers from local florists (Ibisworld.com, 2017). I can exploit these weaknesses which act as a gap in the industry as my competitive advantage to outperform my competitors which are saturated in the market.
Conclusion
The success of any business depends on how well the company satisfies the needs of its target customers. To meet the needs of the target customer, a marketer has to study the consumer and competitor characteristics in the market, to position itself ahead of the competitors. Therefore, market and competitor analysis are principal components in marketing and advertising. Consequently, I will use the information above concerning the market characteristics of my target customers and the competitive analysis to leverage my floral business ahead of my competitors since the information will be useful in advertising and marketing of my products.
References
Ibisworld.com. (2017, December). Florists - US Market Research Report. Ibisworld.com . Retrieved April 11, 2018, from https://www.ibisworld.com/industry-trends/market-research-reports/retail-trade/miscellaneous-store-retailers/florists.html
Russell Research. (2016). Generations of Flowers Study.” Society of American Florists and American Floral Endowment. Retrieved April 11, 2018, from https://safnow.org/wp-content/uploads/2015/06/2016-Generation-of-Flowers-Study-Executive-Summary-Word-Doc-PDF.pdf
Yue, C., Zhao, S., & Rihn, A., (2016). Marketing Tactics to Increase Millennial Floral Purchases. American Floral Endowment & Floral Marketing Research Fund. Retrieved April 11, 2018, from http://endowment.org/wp-content/uploads/2017/01/FMRF_MarketingMillennialsReport.pdf
