Online Shopping - Interflora takes the blushes out of sending flowers to Snuggle Bunny.

For Interflora, the internet is the perfect place to sell flowers. The customer can see the product, place an order and avoid the embarrassment of scribbling terms of affection in front of a florist, says Tim Woolgar.

Most of us have bought flowers at some time in our lives. If you're a woman it's most likely that you went into a shop on your way to visit a friend or relative. If you're a man, you probably picked up the phone and scanned the Yellow Pages for an Interflora Freefone number, and had them delivered.

According to Interflora's experience, how you buy your flowers depends to a large extent on sex, that is to say, gender. Women aged between 35 and 54, buying over the counter, account for around three-quarters of all flowers sold. Of the remainder, most are bought over the phone by men in the 20-35 age group, with a small but growing proportion going through online sales - almost exclusively to young men. Why young men choose to send flowers in such numbers also has something to do with sex, that is to say, romance. Importantly, Interflora's latest online idea includes a service to help you compose suitably convincing sentiments for your Valentine bouquets.

New media, including online malls and in-flight systems, currently account for about half of one per cent of Interflora's orders.

However, says Interflora head of communications, Howard Park: "The rate of growth for new media is similar to the early take-up of telephone ordering when that was introduced." And the stakes are high. After seven years averaging eight per cent annual growth, the cut flower market in the UK is worth œ1.3bn. Interflora's share is just under a quarter of that.

Telephone ordering was introduced 10 years ago and now accounts for around 10 per cent of turnover. The organisation takes about one million telephone orders per year. With comparable growth rates now occurring for new media, Interflora sees itself on the threshold of a major strategic development.

Says Park: "Interflora is now at a crossroads. We need to consider much more investment in supporting our initiatives on e-commerce. It can no longer be run as incremental business."

To understand how Interflora arrived at this crossroads it's necessary to look at the organisation itself. "We are similar in many respects to a franchise network but without the formal controls," says Park. In fact Interflora is neither a franchise, a limited company nor a plc, but a huge, internationally-networked, non-profit-making trade association which even has its own currency, the Fleurin.

Florists who want to join Interflora must pass certain quality thresholds, take a training course at the headquarters of the "UK Unit" in Sleaford, Lincolnshire and pay an annual subscription of œ540. There are currently 2,500 independent florist members in the UK and 58,000 worldwide.

Once part of the network, florists participate in a reciprocal order-taking and fulfilment scheme for long-distance deliveries. The florist who takes the order also takes 20 per cent of the price of the bouquet.

The florists who make the deliveries accept reduced margins - for example, they take œ8 for a bouquet they would sell over the counter for œ10, and it all evens out over time. There's also a œ2.99 service charge which gets split between the order taker and Interflora's head office.

International orders, involving potentially complex currency exchanges, have been simplified since the introduction of the Fleurin in 1948. Exchange rates are set monthly by each national Interflora Unit. Communications between UK members have been achieved, for the last 10 years or so, using computers connected via an ancient BT service known as T-Link. The system is soon to be updated as part of the overall new-media plan.

In order to steer Interflora towards a coherent new-media strategy, Park - who claims to be "the least technically-minded person you could hope to meet" - and his new-media manager, Janette Wickens, faced the daunting task of convincing the Interflora board of the potential of new media.

The nine-member board - florists elected tri-annually from within the network - must approve all decisions affecting overall strategy.

"The board are all quite receptive and creative business people themselves," says Wickens. "But they're not technical at all. We managed to convince them, however, that since some members were already using the net and creating web sites themselves, it would be better to get organised and do it centrally."

The newly-formed team of Park and Wickens decided to market Interflora through one of the country's first net-based stores, Rosetta Milestone, in 1994. "Production values were low," says Park with a rueful chuckle.

"They used graphics scanned in from printed catalogues. It was difficult to find and difficult to use."

Interflora parted company with Rosetta Milestone after 18 months at which point it was receiving about one order per day from the system. Park and Wickens didn't see this as a failure, however, partly because of the results of an encouraging trial on the Galleria 21 kiosk at Heathrow airport.

This combined with their experience in the 1980s of generating orders via teletext as well as low-volume trial with Minitel-type terminals, to convince them that online ordering had potential.

"Considering that all those systems were not very user-friendly, we were surprised at how many orders we did get," says Wickens. "What was interesting with Rosetta Milestone,was that the orders were global," she adds.

Interflora persevered, joining up with various new online shopping environments as they emerged. The brand is currently available on CompuServe, BarclaySquare, LineOne and in a jointly branded exercise with Sainsbury's. "We have gained lots of useful experience at a relatively low cost," says Park. "It started out as a very small outlay, as incremental business, and that's the way it's stayed until now."

Last year, Interflora teamed up with BT and the specialist agency Module Communications to develop software for in-flight entertainment systems.

The latest development has been a link-up with Lauda Air as part of its 'Dream Factory' airline interactive service. Amongst other things, this enables passengers to order flowers from Interflora, using a key-pad, during their flight.

At the beginning of 1996 Park went on record as saying he anticipated that new-media outlets would account for one per cent of Interflora's business within the year. Eighteen months on, his prediction turns out to have fallen short by half. Nevertheless his faith remains unshaken: "I'm not disappointed," he says. "That still represents very significant growth and we expect more."

This is the crossroads Park and Wickens have reached, and to achieve this continued growth Interflora is taking the plunge and launching its own web site. Says Wickens: "It's a big investment for us considering the way we've worked up until now. However, we've been able to do it because costs are significantly lower than they were a year ago." Wickens refuses to divulge figures, but work on constructing the site with Hammersmith-based agency Foresight has already been going on for six months. The web site is due to go live in December.

Says Wickens: "We feel that third-party malls are already on the decline in the US although over here they probably still have some way to grow. In the long-term though, we need our own web site. Starting one up is no different to starting any other kind of shop. It requires a lot of thought, planning and investment."

According to Wickens, the web site will be targeted at new users on the internet. It aims to be simple to use and easy to navigate, and will offer UK and international delivery options as well as flower-related magazine-style features and, of course, that sentimental message helpline for clueless Romeos.

The introduction of the web site will coincide with an overhaul of Interflora's ordering and internal communications system. Currently all online orders are routed through the base at Sleaford where they are printed out before being re-entered into the telephone ordering system. Telephone orders are either automatically directed to a local florist via a call-divert, or routed through Sleaford depending on when and from where the order is placed.

"Ultimately we want all orders, whether they originate from phone, computer, kiosk or wherever, to funnel into our central system, where they will all be processed together," says Wickens.

Group communication is being improved with the introduction of new computers distributed by Sleaford. They're replacing the steam-powered T-Link system with a communications package provided by CompuServe. As well as simplifying business, says Park, this should also see-off some of the few remaining BBC Acorns and similar museum pieces that many Interflora florists have been using happily for the last 15 years.

For the future, while Interflora's attention is sharply focused on the web, Park is keeping a close eye on developments in digital TV: "We've seen a lot of presentations from people with various ideas but so far we haven't made a commitment. We think digital TV could accelerate the whole take-up of e-commerce."



WHY THE NET IS PERFECT FOR FLOWERS

Don't underestimate the "snuggle-bunny factor" when it comes to assessing the popularity of flowers on the internet. BarclaySquare discovered early on that people were turning to online ordering to spare themselves the embarrassment of dictating messages such as "To Fluffy Cuddlesome from Huggy Bunnikins" to a florist.

Flowers are one of the products leading the way in online sales. In a recent Yahoo! user survey, flowers emerged as the fifth most popular item for online shoppers, after software, books, electronics and CDs. On average, the survey showed, online shoppers in the UK spent œ45 on flowers over the first six months of this year.

Datamonitor consultant Luca Newbold says he believes the high take-up of flowers online is partly explained by the strong correlation between buyers and internet users. "If you look at the demographics of internet users, largely men aged 20-35 earning œ20,000 a year, that probably correlates strongly with the people who buy flowers." Newbold's comments fall largely into line with the experience of Interflora. People who order flowers over the telephone, rather than over the counter, tend to be men in this age group.

This switch from telephone ordering to online ordering seems a comparatively easy one and Newbold also identifies the snuggle-bunny factor as a key incentive.

"If you take that potential for embarrassment into account, it would encourage some people to order from their computer terminal," he says.

Flowers also fulfil two of the most important criteria for any product being marketed through new-media outlets, says Newbold: "Flowers are a highly visual product.

When you can actually see a representation of the bouquet you're going to buy, that's a huge advantage over telephone ordering.

"The other obvious advantage is that the delivery network is already in place. People are used to having flowers delivered and the existing systems for doing that are tried and tested. A mature delivery system is essential for any remote ordering service."



LESSONS FROM INTERFLORA ONLINE

Interflora's experience provides a number of insights for anyone thinking about selling high-value, perishable goods via new-media outlets.

The predominant characteristic of Interflora's approach has been a willingness to experiment, combined with a cautious approach to spending. However, as Janette Wickens explains, the point comes when a more serious investment is required.

"The problem we're starting to experience, being in a number of different online malls, is that they've all developed slightly different protocols.

It's becoming time consuming to service them all when new products come along. That's one of the reasons we're going for our own web site," she says.

Flowers lend themselves to online sales because they are highly visual.

However, the choice of products available is surprisingly limited, at least in the case of Interflora.

According to Wickens a limited range is the only practical solution. "Many flowers that are available in the region or country where the order is made are not available where it is fulfilled. We've found the answer to this problem is to go for a small range of standard products."

The possibility of allowing online customers to build their own bouquets in an interactive way has also been rejected. "Customers wanting to design their own bouquets would drive the florists insane. Making up a virtual bouquet is a lot quicker and easier than doing it for real," says Wickens.

A similar problem was experienced by the Brighton-based agency Victoria Real in developing online software for a pizza delivery service. The firm's joint-managing director Rob Love comments: "If you're ordering a pizza online you ideally want to be able to build up a variety of toppings and see what it looks like as you go. "Online, most people haven't got the graphics capability to handle that." Love's RealTrade software system is designed to get round the problem.

"What we're doing is distributing discs with all the graphics on so when you log-on to the pizza site all you're doing is updating the system and downloading the order."



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