A whopping 91 percent of Americans plan to spend money on their significant others for Valentine's Day—and nearly 40 percent of them will spend money on flowers, according to the National Retail Federation.
They'll part with lots of money, too: Some $2.1 billion, up nearly 6 percent from 2014. If you're like most inamoratos, you'll search for those blooms online, and probably wind up placing your order with any of the countless bouquet behemoths that dominate the top of Google searches.
But Farbod Shoraka is hoping you won't.
Shoraka is the co-founder of BloomNation, a Santa Monica start-up with an unusual business model. In an age when Web-based flower giants tend to compete with mom-and-pops, this website connects customers with local florists.
"We're almost completely upside-down compared to those other services," Shoraka said. "BloomNation is the first national network that connects customers directly to florists. We create the same experience as walking into a flower shop."
To understand the significance of what Shoraka is talking about, it helps to know how the Web has changed the business of ordering flowers. Consumers picking out a bouquet on a website are probably looking at a stock photo—one that may bear only a passing resemblance to the posies that actually land on the doorstep. And whether they realize it or not, most customers who buy flowers online are dealing with a middleman—often an "order gatherer" that takes the order, refers it to a local florist and pockets a hefty commission.
Sure, it's just free-market capitalism at work. And as FTD president Rob Apatoff said last year when his company acquired ProFlowers, "shopping behavior continues to migrate to e-commerce and mobile platforms," and with increased competition from grocery and big-box stores selling flowers, "it is our responsibility to attract as much consumer demand…as possible."
But many of America's 16,000 florists have bristled for years at their dependency on the online flower powers, especially about having to sell at a steep discount. As Adweek reported last year, many florists actually lose money on Valentine's Day.
"Local florists are a dying breed," said Lance Williams, who runs the Playa Del Rey Florist in West Los Angeles. "It's a highly competitive industry with lower and lower margins. Staying in business is now a sign of success!"
BloomNation aims to remedy these gripes by acting as a portal that allows Web shoppers to find, and patronize, an independent florist themselves. After entering the ZIP code where they'd like flowers delivered, visitors to BloomNation are taken to a page showing a choice of arrangements made by local shop owners. Photos, prices and delivery times—all are from the actual florists, whose profiles also appear on the page (see an example here). BloomNation's architecture also allows the florist to take a photo of the arrangement when it's finished, then send it to the customer who placed the order—just so there are no disappointments.
Shoraka says most floral designers (and give them a break, folks, because they don't make very much) lack the time and technical savvy to compete with the online flower powers. "Our platform allows florists to create stories about their own works," he said. "They put in images of what they create. They control the design and pricing. We help the customer tap into that hyper-local information." In return, BloomNation takes a flat 10 percent cut of the sales.
BloomNation just closed its second round of funding and has raised $8 million to date. The site is growing between 15 percent and 30 percent monthly, and its network of florists now covers over 3,000 cities.
It's not often you find a Web start-up that funnels business back to the brick-and-mortar sector, so can BloomNation actually blossom in a competitive market? Victoria Markley, director of strategy for e-commerce consultancy Gorilla Group, said so-called "marketplace" sites (Etsy, to name one) are a viable model—but only time will tell if the model can work for flowers.
"BloomNation will need to prove they can drive sufficient business to recruit and retain top local florists," she said. "An additional concern here is that once the local florist establishes a direct relationship with the end customer, it could diminish repeat orders through the BloomNation site. That in particular could have implications on the business' long-term viability."
But for now, florist Lance Williams is happy he signed up, citing his shop's 477 percent sales increase for this winter holiday season. "BloomNation has helped us to take up a new online fight to compete, to get business that we used to get," which is only right, he said. "We actually are the local florist."