Online Flower Shops In The
Los Angeles, CA (PRWEB) February 22, 2012
Although online flower shops captured significant market shares from brick-and-mortar florists in recent years as more consumers shopped online, the industry still suffered significant revenue declines as a result of the economic downturn. According to IBISWorld industry analyst Agata Labianca, poor economic conditions, including weak consumer confidence and low disposable income, deterred consumers from making discretionary purchases like flowers. As a result of weakened demand, revenue for the Online Flower Shops industry is expected to decline at average annual rate of 4.0% to $ 2.1 billion in 2012. Declining demand heightened price competition among industry players, and among external competitors, such as supermarkets and other mass merchandisers that offer flowers at a discount. Increased price competition put pressure on profit, which is estimated to account for 1.3% of revenue in 2012. The industry experienced three years of revenue declines from 2008 through 2010, with revenue dropping as much as 17.3% in 2009 during the peak of the economic recession. Some smaller firms were unable to compete and were forced to shut down.
As the economy began its sluggish recovery, improved demand conditions helped the industry recover in 2011, when revenue grew by 2.9%. The Online Flower Shops industry is expected to expand an additional 3.5% over 2012. As a whole, the industry is well positioned to capitalize on the growing prevalence of online consumer shopping as the economy recovers, and will continue to capture much of the total flower demand. ?As with other e-commerce industries, online flower shops can offer reduced prices by using a website as their storefront and delivering from central warehouses, therefore reducing the costs associated with operating a physical retail store,? says Labianca. The order-gathering business model adopted by many online flower shops, by which firms use their national online presence to gather orders and then pass them on to local retail florists for a fee, has also helped the industry gain market share. These factors will continue to drive revenue growth for the industry.
IBISWorld estimates that the top four players (1-800-flowers.com Inc., Florists? Transworld Delivery Inc., Provide Commerce Inc., and Teleflora LLC) in the industry will generate more than half of revenue in 2012. In general, florists tend to be small in size, serving only their local region or city. Additionally, florists can belong to several networks of online flower shops and have their own online store. This further fragments industry revenue. Industry operators must minimize delivery time and costs while maintaining the freshness of their products to remain competitive.
Concentration for this industry has risen over the five years; the number of firms has contracted at an average annual rate of 1.2% to 3,574 in 2012. The fall in enterprise numbers mainly due to smaller florists that went out of business. In general, the industry has come under increasing pressure from grocery stores and mass merchandisers that have expanded their product offerings and offer competitive pricing without shipping or delivery costs. For more information, visit IBISWorld?s Online Flower Shops report in the US industry page.
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IBISWorld industry Report Key Topics
This industry retails flowers online. Industry operators receive orders and payments through their websites and then either use their network of local florists or growers to fulfill and deliver the order. This industry primarily includes revenue from fresh-cut flowers, internet florist network membership dues and gift baskets sold online. Revenue from in-person orders is excluded.
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About IBISWorld Inc.
Recognized as the nation?s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
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