Online florist Arena Flowers has had quite a lucrative time since its launch in late 2006.
The site says it generated £2m in revenues in its first year, helped by a strong focus on SEO, a bespoke e-commerce platform and a Facebook app that provides 15% of its traffic (albeit at lower conversion rates).
Here, head of design and development Sam Barton talks about its web strategy and plans for the future.
Can you give us a quick introduction to the business?
We’re an online florist based in Park Royal. We’re based there as London is a big marketplace for us. Fifty percent of our orders go to Greater London, but Park Royal is also a big logistics hub so is it is good for distribution to the rest of our markets.
The business was incorporated in July 2006 and we went live with the transactional website in September 2006. The process of getting the company going was quite the reverse of some businesses’. From February of 2006, we built the website in our free time as we were all employed full time elsewhere. We used that period to test the market. Not a lot of people were doing long tail flowers so we wanted to see how it would go.
The reason we were able to prove the test case and get angel funding was we were able to get Pagerank 5 by August 2006, before we went transactional. In most live e-commerce sites, bread and butter traffic comes from PPC (lining Google’s pockets!) but it’s expensive. We felt that if we could get alternative sources of traffic, we would have a more viable proposition. The early SEO work helped secure the funding and also allowed us to jump straight into the marketplace with a good foothold, so when we turned on PPC we were already on a par with incumbents.
But visibility is nothing, without a good product offering. We cut out all middlemen and buy direct from growers, so we get great prices and our flowers are exceedingly fresh. There are no ‘relay’ fees with us and, because of our high stock turnover, we get fresh flowers in daily and they go straight to the customer, rather than sitting in a hot shop window. We offer free delivery on all of our products and we were the first online florist in the UK to offer FFP-accredited, ethically sourced flowers. That’s been a good USP and has put us in front of supermarkets that compete in the marketplace and have a bigger marketing spend.
In terms of usability, we are fairly obsessive about all elements of our site and its features, to try to maximise the user experience. For example, you can upload a video to go with your flowers. And we send a text message to tell you exactly when your flowers were delivered.
We also put a lot of emphasis on customer retention; we have a very good customer services team and different ways of handling customers to encourage them to come back to us. We have different tactics. Customers that make a certain number of orders will be rewarded with an upgrade or a bottle of champagne, for example. Our emails also have a very high return rate and we don’t bombard our users.
Where are you in terms of sales and profitability?
We did £2m net sales in year one and broke even within the first 12 months of trading. We should do £4m+ in year two and make a healthy profit. We see opportunities to keep growing both sales and profitability at a similar rate going forward through various initiatives.
How have your average order values developed since the launch of the site?
We started off with low-£30s and that has grown month on month. We’re now at £42, even though the volume of orders has grown substantially as we have grown as a business and widened our offering.
The business has really grown fast in a relatively short period of time. We sell Prestat’s chocolates on our website, and they were so surprised at the volumes we were selling that they have asked us to develop their e-commerce platform.
Is there any one thing you could point to as being responsible for that rise in order value?
When we went live, the site looked very similar to how it looks now in terms of its framework. But the offerings were much simpler. For example, we didn’t have an ‘add vase’ option for our dozen red roses, or a ‘make deluxe’ option.
Adding cross-sell options and expanding our offering has been a big thing. Not many florists have an alcohol licence, for example, but ours really helps us to add volume. Nor can any other UK florist offer the opportunity to include a photo, a video or a sound file with your order.
How was your experience with Ruby on Rails while developing the site?
The Rails framework made development very easy and allowed us to grow the site very quickly in the run up to its launch.
By using it, we were able to further our long tail strategy by replicating thousands of pages very quickly. By May, we were able to have 60,000 pages up and were seeing traffic to each one of them. That exercise alone was very important and was a bit of a milestone for us.
The reason I was keen to use Ruby on Rails was that I wanted a content management system that generated dynamic URLs but had keywords in. That’s now regarded as pretty much common sense, but in 2005, when we started talking about it, it was fairly novel. That was something I was adamant about from the outset.
We’re fortunate to have an in-house development team. We are very attentive to the latest SEO chatter and making sure the site is optimised is a very high priority. We went into this with the knowledge that we had to be the best in order to compete.
What are the main downsides? Did you have any support or staff issues?
Finding people to support Ruby is the main issue. You are limited by the people who can support it. There are a handful of people I would trust to look at our code.
It’s not complicated to sit people down and train them if they’re a developer. We’ve done that – I have brought someone in who was fluent in PHP but not in Ruby, and is now part of the working team. It took six weeks and it could have been quicker, but we have a very complicated set of tools.
What are you doing in terms of content optimisation?
We’ve got quite a unique facility for managing our content, which is all done through Ajax. Products can be dragged around a category page to suit a high ranking position, so we can move them up if they are selling well or if we have stock we would like to shift. Likewise, we can move them down if they are not converting.
Our homepage is key for us and it’s quite extraordinary how a day’s sales can fluctuate as you move products around on it.
We have people monitoring both sales and stock throughout the day and moving products up and down. We’re also talking with a company that wants to test some code on our site that will do the job I just described automatically. It puts in some dynamic scripts that monitors clicks and success rates.
I won’t go into too much depth because it is a new company but we’re planning to implement it in the next few weeks to see how it works.
There are lots of tools like this that we have already set up.
What prompted you to launch your Facebook app and how has that benefited the business?
Facebook was an obvious thing to do. It’s amazing how many people use it. A blog and Facebook app were things we wanted to do quickly before they became commonplace. We’re not Sainsbury’s and don’t have a shop to present our offering from, so creating awareness through Facebook is an obvious thing to do.
We get something like 15% of our traffic through Facebook. It might not be the best converting traffic but it’s important for spreading our brand. It was also easy for us to put together – it took us a week to get the functionality going and perhaps another five days of tweaking.
Going forward, would you consider developing a multi-channel presence?
We know from our competitors’ experience that offline for this product doesn’t work as well in terms of margins.
You can, of course, sell flowers offline because there are high street florists. But it is much more profitable for us to refine our proposition rather than expand into offline. Direct marketing for offline alone is very expensive and the conversion rate is terrible. It just doesn’t warrant it.
Have you thought about developing your e-commerce platform into a side-business?
It has occurred to us. The Prestat partnership has been very successful and we know we could do another one of those. We have built both a great technology solution and a highly efficient operational platform meaning we can offer a full blown solution to third parties if we wish to.
The question is where is our time best spent – creating value in the Arena brand or white labelling what we’ve done to date? Or both?
What about launching other sites?
There is a lot to be gained by improving our core offering – we know a lot about flowers and we are very good at them. But we may expand the Arena brand.
We own various other Arena domains but we are in no rush to push them until we feel that we have really delivered the best possible service for UK flower lovers.
Things like expanding our offering for business customers, where we’ve already developed Arena For Business, a unique set of tools to save business time and increase accountability. Pushing that side of the business will be important for us, as well as other areas like weddings, which is a huge market in the UK and often not that well served.
We have watched similar companies to ours expand their offering and it can look a bit tacked on and un-thought-through.
It makes one wonder if they’re doing it because they can’t make enough out of the core flower business and are scrabbling around for other ways to generate revenue. For us, the core flower business has to be robust and stand alone, with no propping up from other categories.
Thereafter, we can take our time to work out what we want to do next.
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