Dynamic Delivery Fees in Floral

Why do most florists still charge a flat delivery fee for every zip code? There is no doubt the cost of each delivery varies based on distance, time and traffic. Consumers already pay extra express priority fees with every other delivery company such as FedEx, UPS and DHL. Most people would not expect this to be any different with a retail delivery especially one offering same day delivery.

It is estimated that most florists can generate up to 30% more revenue each day by managing their delivery assets more efficiently (trucks, drivers, return ETA times, etc).

For example, studies have shown that if you offer a multiple choice delivery option matrix to consumers at checkout for same day delivery, 30% of the people will choose a faster delivery option. This of course assumes you can actually provide this service, meaning you know exactly where your drivers are at and what time they will return to the store. (If your software can’t do this, get new software asap..)

Most florist point of sale systems can’t do this and even the ones that can, can not offer this without enabling live inventory control. If you don’t know what premade arrangements you have on hand (or the customer does not know by looking at the website) then you can’t promise a one hour delivery option for a higher fee.

In order to capture the extra 30% of revenues each day, all your systems have to be talking to each other (POS, inventory module, delivery manager, website, etc). Disconnected systems that are not integrated can't really make this work. This is why big companies spend millions of dollars on integrated ERP systems to service customers better and generate more revenue. The vast majority of flower shops we see do not have a website that talks to the POS inventory module.

The average florist collects $10,000 a month in delivery fees, about $120,000 a year. Over the course of a year, that is an extra $36,000 in incremental revenue.

Do your delivery fees change by the hour? We did in our stores many years back, especially on Valentine's Day each year. It did not take long to realize 75% of our V Day orders were being delivered before noon (even when the person did not ask for it). Once we realized this fact, we started “offering” morning delivery for twice the normal “anytime” fee. Every year 25% of the customers would choose the morning delivery option. It was like free money as we were not doing anything different production or delivery wise.

Maybe it's time to rethink how you charge for each delivery. I guarantee Amazon is thinking about this everyday.