Macro Drivers of Floral Industry Growth/?php print $breadcrumb; ?>
As we close out 2017 and look forward to the new year, we examine growth trends that are expected to impact the floral industry. The industry grew at a modest pace in 2016, with a stronger increase in sales estimated for this year -- despite a declining number of retail florists in the U.S. Retail florist sales are expected to grow on average of 1.4 percent per year through 2021.
The reason for this modest growth can be attributed to improving economic conditions which results in rising consumer confidence and a boost in disposable incomes. Baby boomers will continue to represent the majority of floral spending for the next several years but it'll be the Millennials (sorry my fellow Generation Xers) that will be the demographic providing the next opportunity for growth with a population of approximately 70 million. There are approximately 44 million Xers as reference.
More on Millennials
Let's provide a quick synopsis of this younger generation. As you may expect, they are active on social media and the Internet in general so are therefore more educated about products and pricing when compared to older generations.
With this focus on pricing, they have less brand loyalty. Conversely, they are willing to spend more if they believe the company providing the goods and services operates in a socially and environmentally sustainable manner. Given this desire, they are interested in knowing the origin of products, what it takes to deliver the services and the history of the company.
As expected, Millennials engage companies through social media but also prefer hands-on, onsite experience opportunities such as flower arranging classes at the shop and flower bars. These activities provide them a way to satisfy another key need -- opportunities to personalize and customized these gifts.
Factors Impacting Growth Beyond 2017
Growth is expected to slow from 2018 to 2021 which is a result of the following factors: rising payroll and healthcare costs; finding design and delivery staff; volatile environmental conditions; and uncertainty of running a business under the new president.
Positive factors that may present an opportunity is increased interest in outdoor living spaces and gardening; renewed interest in the environment and "green" living; and growing opportunity in funerals as the mortality rate rises.
Check back for a next blog on how florists could leverage these trends for growth in 2018.