Imagine the following scenario. A young man visits your website, selects a $50 design and pulls out his credit card. He inputs delivery and payment information and then — balks when he sees a delivery fee. (“Ten bucks for delivery?” he fumes. “I’m not paying that!”)
Now imagine this scene: That same young man visits your website, selects a $75 “bundled” option (floral design plus balloon and delivery), happily completes the transaction and goes about his merry way.
A savvy or price-sensitive consumer (and any experienced florist) will quickly spot the error of the man’s ways; he’s clearly paying for delivery in both situations — and paying a higher rate in the second. But for many consumers today, “free delivery” has become an expectation (even if that delivery cost is built into the selling price of the item). In fact, Amazon Prime, which now boasts 80 million members, introduced free delivery so that consumers wouldn’t abandon their carts once they saw the itemized delivery fee.
Florists are still among a select group of retailers who offer same-day delivery, which creates a competitive advantage, but it’s an expensive service to provide. Given those realities and customers’ resistance to itemized delivery costs, florists have two options.
- Ignore the reality that consumers increasingly expect complimentary delivery and lose sales to vendors that promise free (or “free”) delivery.
- Use alternate pricing strategies to stay competitive.
This month in Floral Management, pricing expert Mark Anderson walks readers through those options and discusses why a “secret” to a more profitable delivery department could be found in a popular fast food pricing approach.
