Sympathy by methyae

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									Sympathy1 Floral Purchasing Behavior By: Barrie Rappaport With Tia Tosi Ballarini Ipsos-Insight, Inc. for the American Floral Endowment
Some interesting discussions among team members were held in our Chicago-based office when we were initially asked to write this article about the sympathy/funeral and cemetery/memorial (referred to as “sympathy”) floral market. Two common themes emerged: 1. There’s a perceived notion that people are less likely to send flowers/plants to express thoughts of sympathy compared to several years ago. And… 2. Are retail florists properly promoting their “sympathy” services to the general consumer? The first theme is self-explanatory. But let’s expand on the second for a moment: Neighborhood retail florists often smartly promote their offerings in their windows using signs, posters or a combination of the two. Often these signs cover the windows so that potential customers are unable to view the beautiful floral arrangements and gifts on display. Alternatively, it’s important to promote services for all occasions – holidays, special occasions such as weddings and funerals as well as the everyday “just because I want to” purchase. Many retail florists’ signs promote their “wedding” and/or “sympathy” services, which are key elements to the business owner, but aren’t what brings impulse business through the door each day. Wedding and funeral business is often word-of-mouth and infrequently purchased. The new, unexpected customer a sign might attract would come from someone who’s more likely to pick up an arrangement for their mother for Mother’s Day or for her birthday, or to bring to a friend’s home where they will be a guest. First things first, let’s look at the “rumor” described in the first point: Contrary to what most in the industry have heard, consumers still do purchase flowers and plants to express sympathy. As noted in figure 1, consumer demand for sympathy floral products did lag the industry overall, still, buying increased approximately 3 percent annually between 1998 through 2003 with spending gains twice that of buying transactions: Fig. 1
Compound Annual Growth Rate* 1998 through 2003 % Transactions +6% +3% +2% +3% % Dollar Spending +9% +6% +6% +9%

Total Industry Sympathy (Net) Sympathy/Funeral Cemetery/Memorial

*Includes all product segments: fresh, artificial and dried flowers and plants; excludes seeds, bushes, trees, and bulbs

More importantly, the number of households buying floral products to express thoughts of sympathy has grown in each of the past three years, reaching at least 8.7 million U.S. households, excluding purchases made directly through a funeral home or other third party source (fig. 2). At the same time, spending reached a peak of nearly $25 per product purchased during 2003, ranging from just under $11 when buying for cemetery/memorials to $47 for sympathy/funerals.
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The combined buying for sympathy/funeral, cemetery/memorial. Cemetery/memorial added to diary 1/98. The combined “Sympathy” group cannot be compared to sympathy/funeral data prior to this point. Consumer purchases are tracked. No B2B or other third party purchases such as those made directly through funeral homes are included in these data.

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Fig. 2
Households Reached (mm) % US Population Transactions/HH Dollars Spent/Transaction Sympathy/Funeral Cemetery/Memorial 1998 7.1mm 7.1% 2.9 $21.13 $40.11 $ 8.59 1999 6.9mm 6.8% 2.8 $22.02 $46.23 $ 9.72 2000 6.6mm 6.4% 3.1 $20.97 $44.01 $ 9.30 2001 7.7mm 7.4% 2.7 $20.84 $44.04 $ 8.60 2002 8.2mm 7.7% 2.5 $22.08 $42.70 $10.16 2003 8.7mm 8.0% 2.7 $24.64 $47.12 $10.86

The importance of Sympathy within the consumer floriculture industry is clear – ranking second after “home decorating” for both dollar spending and purchase transactions (fig. 3). Customer traffic fueled by sympathy purchasing captured six percent of demand and one in every ten dollars spent for flowers and plants during 2003. Consumers typically spend more when purchasing sympathy arrangements or funeral “sprays” compared to other products, accounting for the market share disparity between buying (transactions) and dollar expenditures. Fig. 3
Top Special Occasions - All Outlets/Channels
18 16 14 12 10 8 6 4 2 0 Home Décor Sympathy Birthday Christmas/ Chanukah Mother's Day Valentine's Anniversary Day % Dollars '03 7 6

17.1 15.6 13.1 13.1
12 11

All Product Segments

7.8 7.4 6.4 5.9 5.2 5.1 4.7

5.1

5.2 3.7 4.7 3.7

4.3 3.4 2.7 3.1 2.7 2.4 3.3 2.3

% Transactions '98

% Transactions '03

Column 3

% Dollars '98

Ipsos/AFE Consumer Tracking Study

Thinking back to the signs and promotional products in general retail florists’ windows, Wedding doesn’t fall among the top occasions for which consumers purchase flowers/plants. Therefore these signs in florists’ windows are probably “clutter” in the eyes of those not planning a wedding, blocking what could be a beautiful window display. Window displays/signs probably should focus on what will entice that new customer to walk through the door, and focusing on the most popular reasons customers purchase. Retail florists might be better served by promoting their wedding services in other ways such as through direct mail, third party relationships, etc. With sympathy business so vital to the survival of the retail florist shop, our focus remains on these purchases. In fact, consumer sympathy purchases represented nearly one out of every three dollars spent at a retail florist and about one-fifth of buying during 2003 – at least twice that of any other channel (fig. 4). After florist shops, online retailers find that demand for sympathy floral products represent a growing opportunity. In two years, the importance of sympathy buying doubled, currently representing about one-tenth of channel purchases.

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Fig. 4
26 28

Importance of Sympathy By Channel
All Product Segments % Transactions

17

18

% Dollars 11 9 5 3 3 4 5 6

1998

2003 1998 Retail Florists

2003

1998

2003 1998 Supermarkets

2003

2001

2003 2001 Internet (eff. 1/01)

2003

Ipsos/AFE Consumer Tracking Study

When concentrating on sympathy/funeral buying from all channels, consumer demand for floral products remained fairly consistent over the past five years - accounting for an estimated 5% of all floral transactions. Further, retail florists captured one-third of all floral products bought during 2003 to express thoughts of sympathy or to use as a memorial (fig. 5). Even more striking is that these purchases represented 70% of total consumer expenditures. Keep in mind that these purchases represent the general customer without benefit of any additional third party arrangements any individual business may have. Therefore, the true impact of sympathy buying will vary among retail florists. Fig.5
Florist Shop Market Share of Sympathy* Floral Product Buying - 2003
All Product Segments

70%

34% 24% 9%
% Transactions Florist Shops (total) Florist Shops - Sympathy
Ipsos/AFE Consumer Tracking Study

% Dollars
*sympathy/funeral+cemetery/memorial

As noted earlier, retail florist shops continue to hold the largest proportion of sympathy purchases. And, contrary to popular belief, consumers are still buying flowers and plants for sympathy with the industry experiencing an average three percent overall year-over-year lift in demand since 1998. Additionally, consumer expenditures grew at twice the annual pace as buying. Throughout this five year period, retail florists’ market share has diminished (fig. 6) – however the share loss only indicates that the growth rate lagged the market overall and was not a reflection in true volume or dollar declines. Sympathy buying at retail florists increased

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approximately two percent annually between 1998 and 2003 (+5% avg annual dollar growth rate). Today’s highly competitive market place makes the market leader (the retail florist) most vulnerable as consumers have more and more choices available to them. Supermarkets, discount stores and online retailers have been competing with florist shops on both a dollar and transaction basis. Fig. 6
Sympathy Purchasing - Top Outlets All Product Segments Based On Growth and Share of Market (Transactions) Percent Trans. Point PCYA 1998 2003 Change 03vs98 Florist Shop 36.5 34.0 -2.5 7.3 Discount Chain Store 20.0 19.4 -0.6 11.2 Supermarket 10.7 16.2 5.5 75.0 Garden Center 8.5 7.1 -1.4 -4.5 Home Improvement 0.9 2.2 1.3 178.8 Warehouse Club 0.3 1.7 1.4 472.4 Internet N/A 1.5 N/A N/A Sympathy Purchasing - Top Outlets All Product Segments Based On Growth and Share of Market (Dollars) Percent Trans. Point 1998 2003 Change Florist Shop 75.3 69.7 -5.6 Supermarket 5.7 7.0 1.3 Discount Chain Store 4.6 5.2 0.6 Garden Center 4.5 4.6 0.1 Home Improvement 0.4 1.4 1.0 Warehouse Club 0.2 0.9 0.7 Internet N/A 3.3 N/A

PCYA 03vs98 23.5 62.1 50.4 35.3 333.1 582.8 N/A

Ipsos/AFE Consumer Tracking Study

Similar to the total market, convenience and price prompt the greatest number of floral sympathy purchases. The importance of these two factors has become more pronounced over the past five years as customers cited these two factors as the most compelling reason when choosing where to shop for nearly two-thirds of their sympathy purchases up from 45% in 1998. Still, sympathy floral buyers often choose the where they'll shop based on factors that separate retail florists apart from the competition. In addition to convenience and price, customers are very interested in Wire Service, Delivery, Service and Reputation when shopping for sympathy flowers/plants (fig. 7). Since 1998, Wire Service and Delivery has become an even greater “channel selector” in the minds of consumers. Fig. 7 REASON WHY OUTLET CHOSEN
TOTAL MARKET % Transactions January December 1998 Total Sympathy Convenience Price Product Quality Selection Reputation Delivery Service Wire Service Other 100.0 27.7 25.5 13.7 13.7 4.9 1.6 1.1 0.8 11 2003 100.0 33.8 25.1 12.2 12.1 3.9 1.4 0.8 0.4 10.3 SYMPATHY % Transactions January - December 1998 100.0 26.3 19.3 10.8 11.3 10.6 4.8 3.4 2.7 10.7 2003 100.0 35.6 21.3 9.7 7.6 7.2 5.7 2.4 1.8 8.7 Index January - December 1998 100 95 76 79 82 216 300 309 338 97 2003 100 105 85 80 63 185 407 300 450 84

+ + + + -

Ipsos/AFE Consumer Tracking Study

Ipsos/AFE Consumer Tracking Study

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Since 1998, three out of every five sympathy purchases made by consumers were in memory of a family member. When segmented by sympathy/funerals and cemetery/memorial, there is further insight into what drives purchase behavior. Buying is fairly evenly split between family and nonfamily members for sympathy/funerals. The retailers “Reputation” and “Other” reasons trigger purchases for those related to the buyer in particular. On the other hand, Convenience, Delivery and Service influenced customers who bought to memorialize those unrelated to them (fig. 8) Interestingly, consumers purchasing for family members clearly drives demand for cemetery/memorial purchasing. Convenience is the key discriminating factor influencing these purchases. Fig. 8

Sympathy*

Sympathy/Funeral

Cemetery/ Memorial

Sympathy*=sympathy/funeral, cemetery/memorial

Product choice also varies based on whether the purchase was intended for a funeral, an expression of sympathy or as a memorial or to be placed at a cemetery as figure 9 clearly points out. Consumers choose cut flowers more than one-half of the time when buying for sympathy/funeral – mostly arrangements. However, the popularity of buying bedding plants, foliage and potted plants for these occasions has increased since 1998. The lift in outdoor/bedding plants might be a reflection of the recent trend toward graveside services. Among customers buying for cemetery/memorials, unarranged cut flowers – especially bunch/bouquets – have grown in importance over the past six years. Bedding plants are also popular choices accounting 17% of purchases. The relative importance of artificial/dried products is quite interesting. Although down from the proportion held in 1998, four of every ten cemetery/memorial purchases made by consumers were in the form of an artificial/dried product.

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Fig.9

Sympathy Purchasing - Product Segment Importance
% Transactions

Unarranged Cut Flowers Arrangements Potted Plants Foliage Outdoor/Bedding Plants Artificial/Dried

100% 100%

100%

100%

100%

100%

18 6 13 8

23 6 13 6

13

11

19
5 5 1

27 6 6 17

45

43

15

1

41

41

17
10

18 54
12
5

40

11
1998

6
2003
Total Industry

3

7

6
2003 1998 2003
Cemetery/ Memorial

1998

Sympathy/Funeral

Ipsos/AFE Consumer Tracking Study

The sympathy market has been far from static over the past five years as the share positions based on buying (transactions) within each flower product and further segmented by outlet have shifted (fig. 10). Nearly one-third of unarranged cut flowers purchased for sympathy/funerals during 2003 were made at a retail florist. This represents a significant increase in share position compared to 1998 (+16 points), though these gains were offset by eroding share in other flower product segments. Consumers frequented supermarkets to meet their sympathy/funeral needs to a greater degree over the past several years. The lift in buying was felt broadly within all major product segments, particularly outdoor/bedding and arrangements. Discount stores were more competitive in the flowering houseplant market in 2003 than they were in 1998, while the same was true of home improvement stores in the outdoor bedding market. These purchases were likely used for memorials and/or to be placed or planted at the cemetery. Fig. 10
Sympathy Only - Outlet Share of Floriculture Types Share of Transactions 2003 Cut Cut Flowering Outdoor/ Unarranged Arranged Houseplant Bedding Total 100.0 100.0 100.0 100.0 Florist Shop 31.9 38.3 43.9 10.2 Discount Chain Store 19.2 21.2 11.7 13.9 Supermarket 17.3 14.9 19.6 17.3 Garden Center 3.2 1.9 6.5 34.6 Home Improvement 0.8 0.2 5.5 8.0 Warehouse Club 3.3 1.9 0.2 0.7 All Other 24.3 21.6 12.6 15.3 Point Change 2003 Vs. 1998 Cut Cut Flowering Outdoor/ Unarranged Arranged Houseplant Bedding 16.2 -13.5 1.8 -4.1 0.8 2.3 -3.5 -3.1 -1.4 6.6 -0.9 -0.3 1.7 -2.6 -8.4 4.8 3.2 -5.1 3.1 -0.4 2.8 1.9 1.7 8.7 -5.1 5.6 0.7 -13.5

Ipsos/AFE Consumer Tracking Study

As most would expect, sympathy purchases skews toward empty nester households and seniors – especially among the cemetery/memorial segment. Beyond these households, working families

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purchased sympathy/funeral floral products to a greater degree than would have been expected given their size in the population during 2003. At the same time, cemetery/memorial flower/plant buying appeals slightly to single-member households. Fig. 11
200 180 160 140 120 100 80 60 40 20 0 Singles Traditional Families DINKS Empty Nesters Working Families Seniors
*sympathy/funeral+cemetery/memorial

The Sympathy* Buyer: Based on Lifestage - 2003 Heavy Buyer Indices (% transactions lifestage/ % households by lifestage)
All Product Segments

Total Industry

Sympathy*

Sympathy/Funeral

Cemetery/Memorial

Ipsos/AFE Consumer Tracking Study

In conclusion, retail florist shops continue to dominate the sympathy floral market, though the past five years have not been without a struggle. During this time, these purchases account for a growing percentage of the channel’s business. On the downside, overall growth for florists within the sympathy market has not kept pace with the industry overall, resulting in a slip in market share within the sympathy market. In terms of volume contribution, convenience and price drive most sympathy buying. However, deliveries, high service levels (wire service and store service), along with the outlet’s reputation are important features that customers look for when choosing a place to shop. Retail florist shops fulfill these needs to a disproportionate degree and need to take full advantage to leverage these features. So, thinking back to those discussions we had at the beginning of this project …. How can the neighborhood retail florist be more effective in getting their message across to potential customers about their sympathy services – especially for sympathy/funerals? Like most floral shoppers, your customers want to be able to see some of the beautiful arrangements in your window. They are also likely to want (or need) to be completely assured about what your operation has to offer:  First, if you’re not already mentioning your Sympathy floral services in your advertising (Yellow Pages, local mailers, etc.) it’s time to reconsider doing so. Remember, consumers look for Product Quality, Reputation, Delivery, Service, and Wire Service – all services that retail florist offer.  Also consider expanding alternative ways to reach new customers. Perhaps revenue gains can be achieved through ads promoting your services placed on your local newspapers obituary page/section. If your budget allows, take advantage of their online obituary advertising packages as well. Remember to push the same features and benefits that consumers are looking for: Product Quality, Reputation, Delivery, Etc. (online – delivery is extra important).  Some of your regular customers and many of your business customers likely receive monthly bills from you. If so, consider enclosing a “bill stuffer” with a high quality picture of a funeral spray or arrangement along with key information reminding customers of the services of the special Sympathy services you offer.

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Perhaps a reasonably sized sign that says that “local delivery within 24 hours” or “proud member of FTD/Teleflora, etc” would be beneficial.  A telephone number and Web site in an easy to see place might also enhance the convenience of shopping there over a Supermarket or a discount chain.


After all, the key is not only having consumers take notice of your “window” (whether it’s made of glass, a computer screen, or a corner of the grocery store), but ultimately to walk in the door and make a purchase.

The American Floral Endowment The American Floral Endowment is a not-for-profit corporation that raises and prudently invests funds to support production and market research and education programs to benefit the floriculture industry. Over the past 43 years, generous contributions from the industry have enabled the Endowment to invest over $12 million to help find solutions to industry needs. The American Floral Endowment has supported the Ipsos/AFE Consumer Tracking Study conducted by Ipsos-Insight, Inc. since 1992. For previous articles describing the behavior of the floral customer and more information about the American Floral Endowment, please visit www.endowment.org. About the Study Each month, Ipsos collects detailed information on the floral purchasing behavior of consumers through a longitudinal and continuous consumer panel of 12,000 households that is representative of the U.S. census composition. Since 1992, panelists have been recording all flower and plant product purchases made by all household members during that month regardless of where the purchase was made, revealing the importance of all outlets in satisfying the consumer demand for floriculture (e.g. florist shop, supermarket, garden center, Internet, wire services, mass merchandisers, warehouse club, etc.). For information about the Ipsos/AFE Consumer Tracking Study, please visit www.ipsosinsight.com\flowers.cfm or contact Barrie Rappaport at 312-665-0541. NOTE: The IPSOS-Insight/AFE Consumer Tracking Study only tracks the purchasing habits of U.S. households (referred to as "consumers" in this article) of fresh, artificial and dried flowers and plants as listed in this report. Some examples of floriculture purchasing not included in this study would be: commercial/business purchases, floral purchases included as part of a services package (e.g. hall rental, funeral arrangements), exports from the U.S., plant rentals, seeds, bulbs, landscape trees & bushes, planting labor. The Society of American Florists (SAF) calculates that the entire U.S. floral industry, including all products, totals approximately $19 billion annually.

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