The goal to aggressively increase profit from floral delivery fees presents some serious problems for florists, and the industry, that are often overlooked.
Over the last few decades the floral industry has changed the way it approaches delivery fees. At one point delivery was, at least in many places, included free of charge. Then it was heavily subsidized.
Later it became a break-even proposition, then a profit center. Now florists are often encouraged to aggressively pursue greater profits from delivery fees. Making money in the flower business is very difficult, and pricing in the flower business is a very complicated subject, but high delivery fees overlook some known facts:
Everybody Hates Delivery Fees
The research on this is overwhelming...
Econsultancy found that 74% shoppers abandoned baskets due to high shipping costs.
Amazon Prime was introduced because so many people abandoned their carts once they saw delivery fees. Prime uses what is known as a high-low pricing model to take the sting out of ordering from Amazon – Prime members don't have to pay shipping and buy much more often as a result.
You Can't Assume A Dialog
It is often said that if customers don't complain about delivery fees they don't mind paying them. That is a big assumption.
If you're in a restaurant and are surprised by the high prices, you aren't likely to complain about them or start a conversation on pricing with the owner. Instead you are likely to order less, and not go back.
This is the other glass ceiling, the one comprised of consumer expectations, and breaking it is dangerous. Your customers will leave, and they aren't likely to tell you why.
Everybody Hates A Monopoly
We're the only ones that can do it!
Since local florists are the only ones that can charge for local delivery, nobody will mind them charging a lot for it... at least that is how the argument goes.
Really? Do consumers really like it when business take advantage of a monopoly to jack their prices? Before Netflix and streaming became popular did people feel good about their cable bill?
Delivery is expensive to provide, and "free" may not be an option. Bundling is one option, one that works very well in other industries, but being reasonable with delivery fees is absolutely critical. Remember – the pizza guy does mostly out-and-back deliveries for a much smaller fee.
Being too aggressive opens the door for competition shown in the picture. These flowers will, almost certainly, be absolutely terrible. But the distaste for delivery fees is so powerful, and the appeal of free delivery so compelling, that this store will take some business away from local florists.