It’s a time crunch for Arena Flowers in the U.K. from the moment a flower is cut from fields in The Netherlands or as far as Kenya, loaded onto a cargo ship or aircraft, transported to a processing facility and made into bespoke bouquets.
The journey continues as the final package is then loaded once more onto a truck to deliver the packages throughout the U.K.—a final journey as far as 700 miles away from its distribution center. Shoppers can place an order by 9 p.m. and the flowers are guaranteed to arrive the next day by 6 p.m.
Arena Flowers operates its own brand, selling to consumers at ArenaFlowers.com. It also is the supplier for several other retailers, such as merchant Moonpig. When a shopper checks out on Moonpig.com, Arena Flowers will ship the order to the customer. Arena Flowers also has arrangements with several other gift and flower retailers in which it builds and hosts the website, plus supplies and fulfills all the orders.
Arena Flowers says it sources its flowers from Fairtrade-certified farms and delivers approximately 2 million bouquets of flowers each year, which includes flowers from its own ecommerce site and all of the other retailers it supplies for.
“We work with more than 50 hand-picked growers across the U.K., Europe and Kenya and have more than 10 clients who are currently fulfilled through our technology and automation platform,” says chief executive officer John Hackett.
The overwhelming majority of orders include a personalized greeting card. During the pandemic, order volume swelled by as much as five to 25 times compared with a normal day as consumers sought to stay connected with friends and loved ones during an extended period of lockdown, Hackett says. The greeting card processing stage became the bottleneck pain point. It was time to automate.
“We realized we needed to automate to produce high volume, highly personalized orders with a product which is dying from the moment we receive it,” Hackett says.
“Prior to the pandemic, the biggest jump in volume would be about 15% for Valentine’s Day and maybe 25% for Mother’s Day,” Hackett says. “Throughout periods of the pandemic lockdown we experienced a 2,000% increase in year-on-year volume.”
300% web sales growth
In 2020, web sales increased 300% compared with pre-pandemic 2019, prompting Hackett to find a way to automate the greeting card stage of the process in order to keep up, Hackett says. Arena Flowers invested in a customized Kern inserting machine, which inserts greeting cards into envelopes and uses a sortation mechanism with barcode readers to then sort cards into different batches. The cards are then placed with its intended bouquet of flowers—a process previously done manually by employees. Hackett declined to reveal the cost of the custom-made machine.
Before installing the Kern sorting machine, Arena Flowers kept 90 full-time employees on staff. During peak periods, the retailer hired additional temporary workers, bringing the total to 350 to 400 employees, distributed throughout different departments including the printing and sorting department and shipping and fulfillment.
The print department manages the greeting card printing and sorting process. Pre-pandemic, a core team of five to 10 employees would work the print room and be responsible for managing about 50 workers. That number increased to more than 90 during peak periods.
After installing the Kern machine, Arena Flowers can now manage the print room with about 20 to 30 employees total, no matter how busy the day might be. As a result, Hackett was able to redistribute full-time employees to other departments and different roles.
“Everyone that used to work in the print room have all gone on to team leadership roles in operations,” Hackett says.
Hackett says Arena Flowers can capitalize on the experience and skills of employees who understand the front-end of the business. Should something go wrong with a more complex matter, such as managing agricultural fulfillment problems on the supplier side, “they know where to fix it because they understand the business,” he says.
While not running at full capacity every single day, the Kern is busy. In 2021 web sales maintained momentum with an increase of 250% compared with pre-pandemic 2019 sales. 2021 increased by 80% compared with 2020.
After investing in the Kern, Arena Flowers decided to make personalized greeting cards free to all customers on any sized order, an incentive to keep customers coming back, Hackett says. Arena Flowers can now handle 125,000 orders per day during holiday rush periods with ease, Hackett says.
“We realized as AOVs increased that people were prepared to spend more to make grander gestures to make them feel connected,” Hackett says. “So, we waived delivery fees and waived the cost of the greeting card.” (Hackett did not specify average order value.)
Long-term plan to expand
Previously, during high volume periods, Arena Flowers rented vacant warehouses. When COVID-19 hit, warehouses stayed vacant and Hackett says the retailer jumped on the opportunity to rent permanent spaces to meet the pandemic-fueled boost in demand. The company expanded its warehouse footprint to approximately 250,000 square feet from its previous permanent 35,000 square feet. This allowed Arena Flowers to house the Kern as well as the influx of inventory going in and out of its distribution facilities, Hackett says.
“By June/July 2020, we made the commitment to stay in the space we were scheduled to vacate,” Hackett says. “Having done that, we felt sufficiently confident in our ability to maintain scale and have done so since then.”
Selling flowers can be an unpredictable business, Hackett says. Through its ecommerce site geared toward corporate clients, Arena Flowers Corporate Flowers, orders are planned and placed over 10 weeks in advance, he says.
“We’re a website that’s entirely reflexive to customer demand,” Hackett says. “And that can change literally with the weather. If Boris Johnson and the government decide there might be a soft lockdown, people start buying a lot of flowers.”
The retailer’s supply chain forecasts are two to three weeks in advance at a minimum, Hackett says, and commitments with suppliers are made at least five days out.
Hackett says its retail clients that it supplies orders for plan to offer shoppers midnight as the cutoff for next-day orders within 12 months, which would challenging for Arena Flowers to handle, he says. “We’re a small island but it can be tricky to logistically coordinate delivery 600 or 700 miles away,” he says.
Mobile-first way forward
Building a stronger retention of customers is the company’s next goal and may involve a combination of an app as well as a rewards plan.
Arena Flowers houses its website with Amazon Web Services (AWS) and did not have a problem handling the additional traffic on its site in 2020 and 2021, Hackett says. “It’s easy for us to dial up or down to handle the fluctuations in web traffic,” he says. One day may be slower while the next might jump by 18 times the norm, he says.
While its robust website allows Arena Flowers to personalize the customer experience, Hackett says the next point of action is to focus on customer growth using mobile.
“There were competitors who did a better job than us with mobile, particularly in the second year of lockdown,” Hackett says. “And I think it’s possibly to do with their having apps.”
Hackett wants to give people reasons to come back to Arena Flowers.
Less than three years ago mobile customers accounted for only 20% of sales. Today, 50% of Arena Flowers’ traffic comes through mobile, “which is astonishing,” Hackett says. “It means everything we do has to be mobile first.”
Arena Flowers is No. 494 in Digital Commerce 360’s Europe Database.Favorite