National Florist Emerges From Filler as the Focal Flower



Posted: Monday, November 17, 2008

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On the Dragon's Den last week, Cesario Ginjo proposed launching an innovative concept. He wanted to build a national brand of flower retailers and distributors in Canada. According to the CBC Dragon's Den hosts and the National Post, this was a new and innovative business model for the Canadian floral industry that presented a significant opportunity. He stated that if he could find investors to finance his idea of creating a Canada wide florist, he can hit the ground running, open a new location and do $200,000 to $300,000 a year in business. Mr. Ginjo emphasizes the importance of buying power in implementing the plan when he insists, "With that base of sales you have the volume and the buying power to compete with the entire market. It would be like a chain store coming into the market. If you start plopping stores in seven to eight major locations in Canada, which is my idea. Now you can say, 'We are a national brand.' "

Mr. Ginjo's plan fulfills a need in the Canadian market for a National floral company that can provide consistent quality products across the country at lower prices. The concept was unique two years ago, in 2005, when Bloomex introduced its new direct from the grower, National floral company business model. In fact, Bloomex is Canada's largest online florist with production facilities in 7 major Canadian cities. Current production facilities are situated in Vancouver, Calgary, Winnipeg, Toronto, Ottawa, Montreal and Halifax. Bloomex has the ability to deliver to over 97% of the Canadian population for same day and next day delivery from these facilities. The president of the company, Dimitri Lokhonia, who has been in the flower industry for over 9 years, adapted the Bloomex business model after noticing a similar model being used successfully in the US. The original model presented some challenges due to the difference in population density between Canada and the United States. After carefully planning the company production facility locations, it became apparent that these strategic locations could serve the majority of the Canadian floral market. The unique model was a new idea to the floral industry, one completely different from wire services such as FTD and Teleflora, and unique to Canada. The Bloomex business model was simple, buy the flowers directly from the growers, eliminate the expensive middleman and overhead expenses and pass the savings onto customers. It also reduced transit time from growers to the recipient which equated to fresher flowers that last longer at a better price. Bloomex reduced overhead expenses by using warehouses as opposed to retail shops. This business model results in a significant competitive advantage by allowing them to design and deliver fresh cut flower bouquets at 35-50% cheaper than traditional florists. The company has also invested heavily in a customer friendly and secure website to make ordering quick and convenient as well as improve efficiency and lower overhead.

The online floral industry is very competitive and Bloomex has secured a leading position with its innovative business model. In fact, searching for flower services in many Canadian cities will result in landing on the Bloomex.ca website. It is intriguing that they were not recognized by both the National Post and the Dragon's Den as the industry leader. The competitive analysis of the industry will certainly recognize the company as a considerable force in the Canadian floral industry. With the infrastructure already in place, Bloomex makes it difficult for any new competitors to enter the market with much success.

Bloomex's corporate account manager, Phil Cragg, addressed the Dragon's Den comments by saying, "It's shocking to me that none of the panelists knew about Bloomex already being a national leader. With a strong online presence, extensive infrastructure and as a National donor for charities such as the Canadian Cancer Society, it is difficult to imagine, we would slip under the radar." Mr. Cragg has been in the floral industry for 15 years and noticed the trend of shoppers moving online in the last decade. His experience as the owner of multiple retail flower shops has given him great insight into the future floral industry direction.

The technological shift in Canada has influenced the floral industry by emphasizing the importance of an online presence as a florist and business owner. Bloomex has taken advantage of this shift by focusing on a new innovative model, which was launched during the early stages of the online Canadian floral industry. The market has since developed into a much more competitive marketplace and launching a similar model now would simply not have the same impact or efficiency. With a first mover advantage, Bloomex has garnered the experience and knowledge necessary to succeed over the long-term in the industry by operating efficiently with a strong National infrastructure and presence.
 
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Top-level comments on this article: (1 total)
» left by David Pekrul
 3 years 74 days ago.
66 fans.
I didn't know about Bloomex, but I did see that episode of Dragon's Den. I couldn't understand why they were so excited with the presentation, as I figured that there must be a system already set up in Canada. Maybe they should do more research before they invest their money.
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