This Bouquet Company Just Cut Flower Delivery Costs in Half
My mother lives in China and I only see her once a year during Chinese New Year when we have our family vacation. For all the other holidays, I rely on Skype and snail mail.
One year I decided to send her some flowers from overseas—a risky move because I had heard horror stories about hundred-dollar bouquets never arriving or arriving in a pitiful state. I took a chance and ordered with one of the major online flower gifting services, spending well over $100.
I was more fortunate than others. My bouquet arrived—but a picture from my mom showed that the flowers were wilted and the arrangement looked nothing like the design advertised on the website. I was disappointed and puzzled at why the flowers could look so bad when I had paid so much.
After chatting with Ajay Kori, co-founder of UrbanStems, a company that aims to fundamentally change the online flower gifting industry, the answer became abundantly clear. As it turns out, most flower delivery websites work the same way across the board, even when ordering domestically.
“The way that it’s set up creates a system where customers are paying more money that they typically would and getting a worse quality product,” he said.
When we order flowers online, it is generally through an aggregator, such as 1-800-FLOWERS or FTD. These companies take customer orders and pass it through a wire service that goes to a local florist who fills the order.
The local florist tries to build the design based on what comes through on the wire service. The cost for consumers is high because the flower gifting company, the wire service, and the local florist each need to take a cut.
Unfortunately, at the end of the day, that local florist is actually paid less money through the online order than someone walking through their door, and when the flowers go out, it carries the mega corporation’s brand.
“So they’re getting paid less money for something that they have no chance of even communicating with that customer,” explained Kori. “These florists are really busy with their own customers. They’re going to take care of their customers first.”
A New Way to Send Flowers
Kori hopes to change the situation with UrbanStems, an on-demand floral delivery startup. It offers seasonal bouquets ranging from $35–$55, including delivery fee. Founded in Washington D.C., the company expanded to New York last December. As of today, you can get UrbanStems flowers delivered to anywhere in D.C., Manhattan, as well as select D.C. suburbs.
Where UrbanStems is available, customers can send flowers on the same day and choose the time of the delivery. The company only offers three to four bouquet designs at a time to reduce waste. In contrast, the average local florist has a 50 percent spoilage rate, meaning for every stem they sell, they throw one away.
“We work directly with farms all over the world, but mostly in Colombia and Equador,” said Kori.
“Because we only have three to four bouquets at any given time, versus hundreds of them on any of the big sites … we are able to keep our spoilage cost much, much lower.”
“Instead of going to an importer, then a wholesaler, then a florist—where it sits for a couple days—[the bouquet] goes directly off the stem to our distribution locations in Manhattan and D.C., and then zipped out on a bike messenger in under an hour.”
The bouquet designs are created in house by a team led by a head designer.
“We create that recipe, and that recipe is sent down to our farms, where it’s replicated,” said Kori. “Part of the reason that we’re able to offer a price at such affordable rates is that there’s no floral work being done in our warehouse. This is all done before it’s sent to us. Sometimes it’s done at the farms, sometimes it’s done stateside. It really depends which flowers are involved.”
There are two advantages to this system. First, the middlemen are cut out, thus reducing costs for the consumer. Second, the flowers spend less time in transit and will be longer lasting for the customer.
“Because we go off the stem to our recipients in only a couple of days, versus like a week and a half typically when you’re buying from a florist, our flowers tend to last close to two weeks because all the time is being spent at the recipients house rather than going through this complicated supply chain,” said Kori. “Everything we do is to try to make it fresh and affordable for the customer.”
In addition, the ordering process only takes minutes.
A customer goes onto the UrbanStems app or website, where they are given a choice of location: New York or D.C.
This brings them to the bouquet selection page, where they are provided a choice of three to four curated bouquets. Once a bouquet is selected, the customer enters the delivery information and chooses the time of delivery.
There is a section for the customer to write a message to the recipient. The final step is payment. Tax is added, but it’s always free shipping. Finally, the messenger takes a photo of the bouquet in front of the recipient’s door and sends it to the customer as confirmation of delivery.
“So you know exactly when the flowers are delivered and also exactly what the flowers look like—and they look like what you picked on the website,” said Kori.
“Because we’ve lowered the price point and made the experience better, we see people who usually only send flowers one or two times a year begrudgingly are sending 10 times a year with us now,” he added.
I Tried It
I decided to try out the service by sending an UrbanStems bouquet to my office. I found the website clean and easy to navigate, and I completed my order in just minutes. However, the $35 bouquet was already sold out at my time of ordering, which was late afternoon, so I took the $55 one.
I selected delivery time for 4 p.m.–5 p.m. and the bouquet arrived at 4:30 p.m. sharp. It was nicely packaged in burlap, with a water pack included.
The bouquet was not large but the flowers were fresh and my message was handwritten. Moments after it was delivered, I received a photo of my bouquet in my email.
‘Obsessive’ Customer Service
My experience with UrbanStems confirmed that they do indeed deliver flowers fast and fresh, but there are only three to four bouquet designs available at once, and they are all created from seasonal flowers. While this is eco-friendly, it limits the customer’s choice to have a customized design.
Kori said that he and his team try to accommodate the customer as much as possible, even if they can’t be the ones fulfilling the order.
“We are absolutely obsessed with our customers,” he said.
“If someone calls us and asks us for something that we don’t have, something very custom because it’s very meaningful to them, we will call whatever florist is near the recipient, negotiate with them, and take care of all the logistics so the customers doesn’t have to do anything. We don’t charge [the customers] for that. We just have them pay the local florist directly. But we’ll do that because we want anyone who calls us or any of our customers to be completely taken care of no matter what … We won’t take any cut whatsoever.”
Kori said that this kind of customer service philosophy doesn’t just benefit the customers.
“We really didn’t advertise, we didn’t market for the first year of the company because our customers did pretty much all the marketing for us,” he said. “Almost all our customers came from referrals in the first year. A very high percentage of people who received bouquets turned into customers.”
Fit for the Tech Era
Kori said that he and UrbanStems co-founder Jeff Sheely didn’t originally intend to start a flower delivery company. They initially planned to develop a startup that would use social data, as opposed to credit scores, to predict whether someone would be a reliable tenant or not.
This would help people like immigrant and international students who do not have credit scores with apartment rentals. However, the two entrepreneurs soon found that their new venture would not be a sustainable one. Most landlords were not keen on trying new technology, which made it hard to grow the business.
Luckily, a new idea was percolating in Kori’s mind. He recalled living in New York and trying to send flowers to his girlfriend who lived in Philadelphia.
“Every time I’d have a really terrible experience,” Kori said.
The flowers would often be wilted, late, or even worse, not delivered. After talking with others and finding that they also had similar experiences, Kori and Sheely realized that there was a need for a better, more reliable system for online flower gifting.
“It’s a 100-year-old system,” said Kori. “When you look at the Internet, and especially commerce, it’s made pretty much everything better and cheaper. But it’s the exact opposite with floral. It’s actually made the experience much worse and more expensive. It’s just crazy that when we launched the company, in 2014, that it still exists. So many of our friends that we talked to, they sent less and less flowers because they were just so fed up with how it works.”
Like many other startups, UrbanStems had a humble beginning. Neither Kori nor Sheely had any previous experience in the floral industry—they learned everything along the way.
“When we first started, we went to Costco, bought them out of almost all their bouquets in the floral department, sent a quick email to all our friends in D.C., and said, ‘Hey, we’re delivering flowers today, let us know if you want to send flowers to a significant other for 20 bucks, we’ll bill you later,” said Kori. “A ton of people replied, and it was basically my co-founder Jeff and I riding around in his Zion, dropping off flowers at our friends’s significant others’s places … We were doing the delivery ourselves for quite a while.”
However, with Kori’s experience working at Quidsi, the company that developed online delivery services such as Diapers, Soap, and wag.com, and Sheely’s background as a strategic growth consultant for startups and early-stage tech companies, the two were quickly able to grow UrbanStems into a successful startup.
“We’re absolutely a tech company,” said Kori. “Even everything on the backend is very tech driven. The entire supply only works because of all of the technology we have.”
But he believes the whole process of starting from the ground up and personally delivering those bouquets was invaluable experience.
“Now when we have a much bigger team and a much bigger delivery crew, we still understand all the nuances of how the deliveries happen and everything that’s going on because we did it ourselves for so long,” he said.
A Sustainable Flower Company
It’s not just about keeping a low cost. When sourcing flowers, Kori and Sheely aim for quality and sustainability.
“A lot of the places we source our flowers from are located in ideal conditions,” said Kori. “We looked at the places that produced the longest lasting flowers and at the same time are Rainforest Alliance Certified, Veriflora [Certified], eco-friendly farms that also pay sustainable wages. The farms that we get the vast majority of our flowers from employ about 80–90 percent women and pay them sustainable wages so that they can be heads of households … There are definitely places that grow flowers cheaper than what we’re getting it from. We’re just not sure what they’re doing with their labor practices. We prefer to do things that we know are good for the environment and people.”
Kori also said that UrbanStems is looking to bring on couriers, who are usually independent contractors, as employees, and give them access to benefits.
“It really fits in with our mission,” said Kori. “We really believe that we have the opportunity to in a small way to create an organization where we can get a bunch of people on our team who absolutely love what they’re doing.”
“It’s a virtuous cycle,” he said. “When people love what they’re doing, they deliver a better experience to the customer. [The customers] tell their friends and we end up with more customers. Then we’re able to bring on more people to our team. That whole circle continues.”
Competition and the Future
Not surprisingly, there are other companies across the nation trying to do similar things. There’s The Bouqs Company based in Southern California that also sources directly from South America and flaunts a $40 price tag for all bouquets. They are currently only available in the West Coast.
There’s also BloomNation, which is marketed as the Etsy for bouquets. The platform allows customers to browse hundreds of designs from different local florists. However, it charges delivery fees and the selection is relatively more expensive.
Kori is not worried about competition. In fact, he welcomes it.
“I think there’ll always be people who come in with similar ideas,” he said.
“Honestly, I think it would be a good thing for the world. Especially if some of the bigger players started to try to compete with us. Right now they haven’t really reacted. But if they start to come in and lower the prices, or make their experiences better, then that’s good for everyone. We still think we’ll have a much better experience than them, no matter what, but if we can make it so people aren’t so frustrated every time they send flowers, that’s a win for everyone.”
Kori and Sheely are planning to expand UrbanStems into all major cities by next year. They are also interested in expanding the items they carry. Currently UrbanStems sells “Undone” chocolate bars. Soon, they will add Mast Brothers chocolate bars.
“We’re really open to where our customers want us most,” he said.
“Our goal, what we’re building towards, is that anyone can pull out their phone in any city, and within a couple taps, have an awesome gift being sent to anyone they want in under an hour. Just like how you pull out your phone and call a car when you need to go somewhere, we think it’s just as important to make someone else’s day and make that as easy as possible.”