hallmark to close flower and gift distribution centers

Hallmark, which for nearly 100 years has expressed America's best wishes, is exiting the online flower and gift business

By late April, Hallmark expects to close their distribution centers and lay off the last of 35 employees.

"We took a close look at our business model and the competitive marketplace right now," said Julie O'Dell, head of public relations at the Kansas City-based company. "We concluded the investment needed to keep those businesses running and competitive were such that we couldn't guarantee a financial return."

Hallmark is also exiting the catalog gift business it runs out of the 106,000-square-foot warehouse it has leased since it decided to branch into online/mail-order gifts and flowers in 2001.

Hallmark.com will still exist, O'Dell said, offering stationery, premium e-cards and customized photo cards.

The company is a family-run business and is not required to report earnings as publicly traded companies are. O'Dell would not comment on market share or what portion of sales come from its catalog and dot-com business.

Hallmark was one the last players to enter the $2 billion online flower business after it tried selling flowers in its stores in the mid-1990s, said Terril Nell, floriculture professor at the University of Florida.

"They know the personal expression business, and they have done well in it. The floral industry has become a global business and the logistics has to be done properly or it's not successful," he said.

ProFlowers and 1-800-Flowers own the lion's share of the online market; both have distribution centers in Memphis.

Hallmark, some sources say, may have 5-10 percent of the dot-com flower market -- which is growing about 15 percent a year -- three times faster than the brick-and-mortar business.

Hallmark came in with the idea of being the gold standard and targeting a high-end demographic, said Erick New, who owns the Garden District but was a consultant to and then head of production at Hallmark.com until 2003.

"Then they began to change their market to focus on the same market as 800-Flowers and ProFlowers, which tends to be younger and more budget-minded," he said.

New and another expert who was also a consultant in the Hallmark.com startup days say Hallmark was so fastidious about protecting its name that it chose to manage the details -- including the supply chain -- itself. They also said Hallmark did not have flower experts on staff.

"They were pretty ambitious. The flower business is very perishable and very variable. It's almost impossible for one company to vertically manage all the details," said Brian Myrland.

He owns DB Manufacturing outside Madison, Wis. As late as the 1990s, it specialized in flower processing equipment; Hallmark.com was a client.

"They built the Taj Mahal in Memphis, a huge facility with state-of-the-art coolers and conveyor belts moving goods based on bar coding," he said.

"I knew something was up because about six months ago, I got a call from an insider at Hallmark wondering if I had any resell capacity," Myrland said.

Hallmark expected the business could be so big that it didn't want to risk it by not having the right infrastructure, he said.

"It built adequate space right from the start and then spent the rest of its time chasing the business," he said.

smart sales and service tactics

The SCENARIO:
A customer says, “I don’t want to spend too much money BUT I want to get something nice!” The standard response to this situation is to react to the roadblock the customer has placed in your path: I don’t want to spend too much. Many sales people will automatically go into super-frugal mode and let the customer know what the starting point for an arrangement is or how bud vases are priced. But you need to listen closely to what your customer is expecting.

The PSYCHOLOGY:
Did the customer ever say how much she wants to spend? Does anyone want to spend too much to get what he or she want or needs? No!

The SMARTER RESPONSE:
Acknowledge what your customer has mentioned, “Yes, Ms. Customer, we can create a beautiful arrangement for you!” Then move directly to the delivery information and then the card message. If the card message says, “Happy 25th Anniversary, love all your children and grandchildren,” do you think your customer would be happy if a bud vase is sent? No, she would be upset and disappointed. Focus on the card message, make an appropriate suggestion and offer a price range based upon the occasion. “Ms. Customer, you may want to send one of our medium-sized spring vase arrangements, perfect for a coffee table, for this special anniversary. That design is priced between $XX and $XX.” Since the customer did not volunteer a price, it’s your responsibility to suggest an appropriate price range. Once you make an educated recommendation, the customer will either choose the design and price you have described OR let you know exactly what she wants to spend (and you can then discuss items in that price range). Listen better and you can give smarter customer service!

Source: Floral Strategies

care & handling of flowers

Ask any flower researcher about flower quality and it’s a sure bet temperature will be an important part of the conversation. Flowers are affected at every step in the chain by temperature conditions: too cold, the blooms suffer chill or freeze damage; too warm, blooms open too fast. Fluctuating temperatures result in high condensation on petals and inside sleeves, providing the perfect environment for Botrytis. The higher the temperature, the faster a flower respires (or uses stored food such as sugars) the quicker the flower dies. Close-to-freezing temperatures slow respiration and flowers go into a state of hibernation.

Post-Harvest Breakdown
Take a look at what the industry calls the post harvest “cold chain” — the various links in the process, after the flowers are cut, during which flowers must be kept cold in order to assure good vase life. Flowers should be placed in clean, acidic solutions within 30 minutes of being cut. Stems are then graded and bunched, transferred into holding solutions inside coolers at 33ºF to 38ºF. Ideally, bunches stay overnight in the cooler to ensure cells are filled and all field heat is out. The next day, bunches are separated according to orders and packed. Blooms should stay cold, so many farms have packing stations inside the cooler. Packing in there prevents condensation from developing on the blooms as they move from a cold to an ambient environment. Because fluctuating temperatures are a form of stress, boxes are pre-cooled: Chilled air is forced through the box contents to ensure inside temperature is 38ºF or lower before the shipment is delivered to the airport. Once boxes arrive in Miami, they are pre-cooled again prior to cooler placement to remove heat built up during transit, because the center boxes on a pallet would never cool down just sitting in a cooler or truck. Some flowers have a high rate of respiration (gypsophila and liatris) and develop heat in transit. Pop open these boxes on arrival and process bunches, or at least split the contents into two boxes to allow air flow and reduce temperature built up inside bunches.

Inside Your Shop, Act Quickly
At the retail level, don’t let flower bundles and boxes sit on the floor until morning deliveries are out. Instead, set up buckets a day ahead filled with a low-sugar flower food or hydration solution. Pre-chill the buckets so they are ready go when delivery arrives — research shows that cold solutions move faster into the stems of most flowers; plus, you avoid problems of condensation developing inside sleeves by putting cold flowers into cold solutions.

Humidity Concerns
Cut flowers lose moisture more readily than many other perishable crops, because of their high surface-to-volume ratio. Both high relative humidity (RH) and low temperature are important in reducing moisture loss from foliage. Proper care and handling requires that you store flowers at 90 percent to 95 percent relative humidity, while maintaining temps of 34ºF to 38ºF to minimize water evaporation. The maximum difference in temperature between any two points within your cooler (the temperature differential) should be less than 5 degrees to keep sensitive flower tissues from dehydrating.

Work the Numbers
The optimum storage temperature range for cut flowers is 34ºF to 38ºF (1ºC to 3.3ºC), except for chill-sensitive crops such as anthuriums, tropical orchids and ginger flowers. Chill damage occurs if tropical flowers are held colder than 50ºF (10°C). Tracking cooler temps daily makes pro-active maintenance easy. Use a thermometer to record temperatures (a typical kitchen thermometer works) rather than relying solely on the wall thermostat. To get an accurate reading, test the temperature of a bucket of solution rather than air temperature. Solution temperature fluctuates less than air temperature. Try to record temps first thing in the morning before cooler traffic starts. Check your service contract and schedule regular tune-ups including vacuuming compressor coils for maximum efficiency.

Beyond the Thermometer
While proper temperature control can help extend vase life and increase flower quality, it’s not the only safeguard you should have in place at your shop. Imbalanced plant growth regulators, disease, lack of water, insect infestations and exposure to UV light at high altitudes all affect plants and flowers. Ethylene also has damning effects on flower quality. The good news is that ethylene production and damage is greatly reduced when flowers are held at temperatures below 38ºF.

Source: SAF