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Shriveled bouquet to girlfriend spurred the venture
The bustling flower retail chain was started by Vikaas Gutgutia in 1994. While his family was from Bihar, he moved to Kolkata after school where he used to help his uncle at his flower shop. The experience of working for his uncle gave him a basic knowledge about flowers and the market demands but Vikaas never considered it as a career option as he didn't envision big returns. (Does that sound familiar for fund distributors and their next gen?)
So for two years, he explored other work opportunities in Delhi and Mumbai. However, the experience of sending a bouquet to his girlfriend in Delhi made him take a closer look at the flowers market again. The bouquet he had ordered for her birthday did not meet his expectations and he felt that he could do better. At the time, all flowers were sold on the roadside and the concept of an air-conditioned shop selling flowers did not exist. With only Rs. 5000 in his pocket, he managed to find a partner who was willing to invest Rs. 2.5 lakh and he opened his first shop on Delhi's south extension pavement. Creating a structure with a perishable product in an unorganized market came with plenty of obstacles and Vikaas dealt with these challenges by segmenting the business into different verticals.
Flowers at its center
To attract high-end customers, the floral chain tied up with fashion designer Tarun Tahiliani to set up luxury floral boutiques branded as FNP Tahiliani. To cater flowers for luxury weddings, the chain has also partnered with designer J J Valaya.
The company built its e-commerce segment on the strength of its retail brand and was able to drive savvy tech customers to its website. Since flowers are often given at special occasions like birthdays and anniversaries that also require gifts, Ferns n Petals has also expanded into gifting where customers can also order cakes, potted plants and stuffed toys in addition to a bouquet. For special days like Valentine's day, Rose day, Hug day, the site gives customers recommendations on what to buy to express their emotions. Customers can choose from multiple forms of delivery and are encouraged to pre-order their gifts for timely delivery. The chain has used social media as a channel to address customer complaints.
Other verticals include gardens, events, a floral academy for customers to learn floral design, but all of the verticals at their core are centered around flowers. Vikaas learned his lesson when he ventured into setting up another business for selling chaat but the operation failed. So all of the segments at Ferns n Petals are focused on giving customers beautiful flora.
To expand the business, the retail chain chose the franchisee model. How does one maintain the quality of the franchisee business for a perishable product when most of the market is unorganized? Ferns n Petals is selective about who it chooses to franchise with and looks for young, enthusiastic entrepreneurs that can follow the protocols. The company has a detailed training program for their franchisee partners to learn all the intricacies of running a flower business.
In many countries outside India, floral design is often seen as art and there are special institutes to go to train but with the lack of such facilities in India, Ferns n Petals has stepped into the gap by inviting experts from floral institutes to train aspiring florists. The company offers these skilled workers to their franchisee partners. To maintain the quality of the flowers at all its stores, Ferns n Petals shares vendor details with its franchisees. The brand has distribution hubs in Delhi and Mumbai from which franchisees can access to source their flowers. The retail chain imports flowers from countries like China, Thailand and Netherlands and is able to get discounts as a bulk buyer. The chain then offers franchisees the opportunity to buy these same flowers at a subsidized rate. The company also passes some of its online orders to its franchisees. The retail chain has now expanded to tier II and tier III towns and cities across India.
Uniformity enables scalability
So how did Ferns n Petals become a success? Knowing the business, Vikaas had an appreciation for the product and sourced the flowers directly from growers. The quality of flowers made Ferns n Petals a cut above the roadside outlets and gave it a premium image. Maintaining a structure is not possible without a skilled team and training is key. Vikaas focused on ensuring that not only the home operations knew flowers but so did the franchisees.
Differentiated customer proposition is the key
What Ferns & Petals has done successfully is to offer a whole new level of convenience in gifting flowers, and has found a large and growing client base willing to pay for this. You do not need to go to a crowded market to select flowers and then wait for a bouquet to be made from them. You have the comfort of going online, picking one from a huge variety of bouquets, you have helpful advice that guides you to the appropriate choice for the right occasion, and you have confidence that the brand instills that only the best flowers will go into this bouquet and that it will be delivered on time. What you are getting is guidance, choice and quality - all wrapped into a highly convenient format. Consumers pay a price for this.
That's the key take away for financial advisors from the Ferns & Petals story: deliver a proposition that offers guidance, choice and quality - all wrapped into a highly convenient format - better than what is routinely available in the market. Offer a genuinely premium proposition, and you will find investors willing to pay for it.
All content in Marketing Wiz is created by Wealth Forum and should not be construed as views of Kotak MF.
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