Analytics Guide Business Model of New National Florist Network

by   |   June 28, 2013 2:39 pm   |   0 Comments

My Beverly Hills Florist home page 650x490 Analytics Guide Business Model of New National Florist Network

Florist shops that are part of the BloomNation network can highlight their own floral arrangements. Above, the home page of My Beverly Hills Florist.

David Goldstein, owner of My Beverly Hills Florist in Beverly Hills, Calif., does not consider himself to be Web savvy, but it’s the Internet that’s brining in his big business through a webpage he updates himself.

His business has gone from sending out one to three bouquets per day up to seven to ten bouquets.  The credit, according to Goldstein, goes to BloomNation, the start-up that is bringing big data to the floral industry.  “BloomNation is going to rock the floral world,” says Goldstein, “and I’m glad I’m one of the first to sign up.”

Gregg Weisstein, chief operating officer for BloomNation, describes his company as the first online floral marketplace where florists can display their own content, such as photos of bouquets.  Founded in August 2011 and headquartered in Los Angeles, BloomNation’s team brings their expertise with code to the flower business.   BloomNation is powered by an algorithm that makes predictions based on the many data points generated by each flower.  “We can understand what the customer wants to see before they see it,” Weisstein says.  The algorithm runs on a mixture of MySQL and Microsoft Excel.

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Caroline Daniels, a lecturer in entrepreneurship at Babson College, researches future trends and entrepreneurial strategy.  According to her, “applying analytics to customer preferences” is happening more and more and there are now analytics involved with almost all retail sites.  However, not all companies use the data they get well.  Doing it right is what Daniels calls “leading edge” and BloomNation’s business model has a chance to succeed, she said.

Every floral arrangement on BloomNation is tagged by the florists with a constellation of data points such as color, type of flower, price, and what special occasion the bouquet is appropriate for.    The algorithm continuously takes in real-time data from the florists’ websites and updates in real time so BloomNation can update its website to reflect the floral market.

The algorithm also takes into account website user metrics like number of website clicks, time spent viewing a page, and number of page views for a floral arrangement or Web page. This allows the BloomNation team to use up-to-the-minute data when making decisions about their web site.  The BloomNation team is constantly tweaking how their algorithm weighs each of these factors to create a profile that allows them to display on their website the right flowers at the right times for the right customer.  The biggest challenge, says Weisstein, is to “just stay on top of the data.”

The BloomNation team believes that the florists know their own inventory best and have set up the tools for them to manage their websites in real time – which means a constant influx of new data to the algorithm.  BloomNation works primarily with what Weisstein calls “mom and pop shops.”  The small florists are mainly like Goldstein, experts in the business of flowers but not big data analytics.  Weisstein says, “We just want to be the platform that gives the florists what they need.”  Goldstein says he did not know anything about the algorithm underlying the website that was helping him connect to his customers.

BloomNation handles all of the analytics on the back-end, providing a simple, easy-to-use interface which Goldstein describes as “floral website for dummies.”  All Goldstein needs to do is upload images of his floral arrangements, name them,, and fill in the categories the arrangement fits.  BloomNation takes it from there, converting the data provided by the florists into data for their algorithm to keep it up-to-date, reflecting the current floral market.

The existing paradigm for the flower market involves middlemen, such as 1-800-flowers or Teleflora, communicating with the customers and the florists having no contact.  The middleman company would send the order to one of the flower shops they worked with who would arrange the flowers to their specifications.  In this model, florists cannot really build their own customer base and, according to Goldstein, lose out on a good percentage of their profits.

One of the major differences Daniels sees between BloomNation and companies like 1-800-FLOWERS is that, instead of standardizing bouquets, BloomNation encourages creativity and unique floral arrangements.  BloomNation, Daniels says, “is de-commoditizing the online florist business.”  However, she adds, the BloomNation business model has to be primarily for high-end florists.  “If you are a high-end florist it would be smart to join this,” she says.

BloomNation’s business model is to use its customer network and its predictive algorithm to cut out these middlemen.  The important thing about the floral market is that, unlike a box of chocolates or a new tie, flowers cannot be shipped cross country.  Even ordering online, the flowers will always come from a local source.  So, the floral business does not center on the global, but on the local florist and the local customer.  This means that the BloomNation algorithm has to include location and the distance between locations when making its calculations.  “It’s not just big data,” explains Daniels, “It’s how it’s applied to the industry.”

However, when sending flowers, the buyer may not be in the same city as the recipient, but the floral arrangements they buy will be created in the city of the recipient.  By having a large, searchable database of florists with complete transparency about their locations, BloomNation can give the florists national exposure and help them build brand identity.  Someone who sends Mother’s Day flowers to the same city every year can develop a relationship with a florist in their city without setting foot there.  BloomNation works with over 15,000 florists from coast-to-coast and in Hawaii.

The goal of BloomNation is to make their shopping experience as easy as it would be through a traditional middleman, but with the added benefit of letting their customers shop local.   According to Weisstein, data amassing makes it so it can be as easy to shop locally as with a mass marketer.  BloomNation has started getting notice outside of the floral business and some bakery companies, ware now interested in the BloomNation algorithm.

Jessica Sirkin, a Data Informed staff writer, can be reached at Jessica.Sirkin@wispubs.com. Follow her on Twitter: @JessicaSirkin.

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