Digital sales generate 55% of HSN’s overall sales, and the retailer is looking to new platforms, such as Facebook Live, to acquire customers.
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Prolman’s experience with organic products took root more than 20 years ago, when as a chef in training he developed an interest in food ingredients and then an expertise in organically grown products. By 1989, he had co-founded Made In Nature Inc., an organic food development and marketing company that introduced organic fruits and vegetables to retail food chains.
Prolman also helped to kick-start the production of organic produce by Dole Food Co. and other suppliers by proving the economics of it among small farmers and expanding to larger operations, as demand grew among supermarket chains. He sold Made In Nature to Dole in 1994, and bought it back two years later, restructuring it as a provider of packaged organic foods. Prolman eventually sold Made In Nature to another food-packaging company, then left the food business to spend the next three years running Sparrow Productions Inc. and RB Records, the entertainment and music label companies that managed the concerts and recordings of his wife, jazz singer Raquel Bitton, whose work has included six albums and performances at Carnegie Hall in New York.
While in the entertainment business, Prolman continued to consult on the side for organic products businesses. But as organic foods were growing in popularity, he noticed that flowers were being left out. “I realized that flowers had been completely overlooked by the natural products industry,” he says. At the same time, he adds, he was watching the development of the Internet, and figured that the web and the organic flower business would make a good match.
But while the business model seemed to make sense, Organic Bouquet still had to take several steps to kick-start both supply and demand. And to legitimately sell organically grown flowers, Prolman also needed the support of a government and industry-sanctioned system equipped to certify flowers as organic. But since this was in 2001, on the downside of the Internet investment boom and bust cycle, he had little outside financial help in getting started. “There was no apparent demand, and nobody wanted to talk about funding an Internet business in 2001,” he says, adding that he got by in the early years with “Band-Aid” financing. “It was difficult to instantly develop an Internet business and build clientele; we had to develop supply first.”
One of Prolman’s first steps was to call on his old contacts in the natural foods business, at retailers like Whole Foods and Trader Joe’s, to build a traditional offline wholesale business to generate cash flow and create more demand for growers. “They knew the organic market, so Whole Foods and Trader Joe’s grabbed onto it right away,” he says.
With wholesale customers lined up, Prolman was able to persuade more growers to produce organic flowers and on a larger scale, while he also worked with Scientific Certification Systems, an organization sanctioned by the U.S. Department of Agriculture, to develop a new Veriflora organic certification program for fresh-cut flowers. “SCS had a program for Starbucks coffee growers, so I asked them to develop a standard for the fresh-cut flower industry,” Prolman says.
Organic Bouquet now sells flowers from certified organic growers in five countries in addition to the U.S. With the supply side growing, Prolman figures Organic Bouquet is also on the verge of a spike in demand.
U.S. growers fulfill orders directly to consumers. Foreign growers ship their flowers to Miami, where they are re-packaged for consumer delivery by a staff of three full-time Organic Bouquet employees assisted by a fluctuating team of temporary workers.
53% open rate
By 2004, his business had matured enough to attract $2.8 million in financing from CP Baker, which also provided its in-house Boxing Frogs IT team to upgrade the Organic Bouquet site with better shopping features and marketing tools.
Claudio Miranda, an online veteran from e-marketing firm NewGate Internet Inc., joined Organic Bouquet that year as vice president of e-commerce and implemented a broader marketing strategy. Among other things, he has developed e-mail marketing programs that generate above-average open rates-they hit 53% during the recent holiday season, Miranda says-using a Responsys Inc. e-mail management system and a combination of in-house and DeepMetrix Corp. web analytics.
In addition to testing the dynamics of marketing campaigns to produce the most effective marketing messages and landing pages, Organic Bouquet this quarter will boost to 10 million the number of opt-in e-mails going to consumers who belong to social and environmental awareness groups. Last year, the retailer appointed Kristy Walker to the new position of vice president of cause marketing, working with these groups to coordinate marketing programs and develop special flower arrangements for their members.
“Both Amnesty International USA and Organic Bouquet share the goal of improving the lives of and securing justice for people throughout the world,” William F. Schulz, executive director of Amnesty International USA, said when Amnesty formed its affiliate relationship with Organic Bouquet last fall. “The life-affirming beauty of flowers is a powerful symbol of hope, just as Amnesty International’s candle is a shining beacon for so many whose human rights are threatened.”
Prolman is counting on that kind of support from-and constant communications with-a growing number of organizations. “We’ve signed deals with dozens of large and small non-profits, collectively representing 10 million unique e-mail addresses we’ll reach every month,” he says. “We’re finding that it’s about repetitive marketing, and with the Internet we can be first and foremost in front of consumers when they need to make a floral purchase. This is how we can compete with 1-800-Flowers.”
But Prolman and company are also working on ways to appeal to even broader audiences, including consumers who may not be initially attracted to the organic movement. Organic Bouquet is marketing a special line of roses associated with celebrities, including Paul McCartney, Tony Bennett and Merv Griffin, and their preferred charities. A purchase of the Merv Griffin Rose, for instance, will include a donation by Organic Bouquet to the Young Musicians Association.
Despite all the donations Organic Bouquet makes under its business model, Prolman says he expects it to be profitable next year. Meantime, with a boost in financial backing over the last two years from CP Baker, he hopes to continue his unusual and aggressive promotions-including a follow-up this year to his sponsorship of the U.N. choir on World Environment Day, only this time in Africa-while expanding his horizons in more ways than one.