Company

Martin Johansson: Business is blooming

Business Today speaks to Martin Johansson, managing director of Malta-based SerenataFlowers.com, the fifth largest flower company in the world.


What is Serenata Flowers’ business model?

Serenata Flowers started out in 2003, when the company bought two flower shops in London. This was a great way of gaining information on the flower industry.

In 2004, we launched a website, and from then on we took a different approach from traditional flower companies such as Interflora and Euroflora.

As a completely new brand, we shifted towards ecommerce and started investing a lot of money into online marketing, which at the time wasn’t very widespread. For instance, we used things such as SEO (Search Engine Optimisation), and in this we were ahead of everyone else.

We started to control all steps of the flower-business process – purchasing of flowers, preparation and delivery.

Our company has its main flower warehouse in the United Kingdom, which receives daily deliveries of fresh flowers, which, when sold, are delivered directly to customers in Britain, hence cutting out the middleman.

So customers place their order online, the flowers are then taken from our warehouse and delivered straight to the customer in the UK.
We also have partner warehouses in the United States, Canada and Australia.

Our company noticed that most people would order flowers when they came home after work, so we managed to push up our cut-off time for next-day delivery from 5pm to 10pm, and we deliver seven days a week to the UK. Customers can request orders placed before 3pm to be delivered on the same day.


How is this different from other flower companies?

If you look at Interflora, for instance, they operate a relay model in the way they sell. Interflora uses local florists to fulfil its orders. In recent years, however, they have started to see the value of owning their own warehouse.

Serenata Flowers gets fresh flowers daily from Holland, and we know that the flowers we send out have all been cut the previous day. This way our customers receive flowers that are a lot fresher than our rivals. Customers might in fact receive flowers the buds of which are still closed, meaning they will eventually last longer.

Our company would never sell old flowers, because the business is built on our capability to retain customers.

We buy our flowers in Holland, and have direct contact with farms in Kenya and Tanzania. We also offer a range of Fair Trade flowers.


You joined the company in 2005. Since then, how have you changed it?

The biggest thing I changed is the operational structure.

When it was still new, our company had opened other shops in Birmingham and Lancashire. I shut these down in 2006, and we moved away from physical expansion onto an online model.

After that, we started growing massively, year on year, and are now the fifth-largest flower company globally. We also developed a really high customer retention rate.

When I first started with the company, sometimes I would deliver flowers myself, personally. It’s not just a managing role for me; I have to look at all levels of the business.

I believe you should never be afraid of doing the nitty gritty work – you could gain a lot of knowledge!


What is the biggest factor behind your high retention rate?

There are two key factors behind this: having a good product and looking after our customers.

Before being sold, all flowers undergo a quality-control process.

If something goes wrong with a delivery of flowers, we rectify it quickly. There is no point cutting corners here. For example, if a delivery is late, customers contact us, they get a quick reply from customer service, and they receive a refund.

In 2012, we got rid of all telephone customer service lines and shifted completely to an online troubleshooting page, where our customers can tell us what is wrong and upload an image if they want.

Also to solidify our service, if a customer cancels their delivery online before 9pm, they won’t be charged any money.


Why did you choose to base Serenata Flowers in Malta?

Although our company was born in London, this is a very expensive city when it comes to paying IT staff. Office space costs are also high.
In Malta, these expenses are less steep, which is why we have been here for the past four and a half years. All of our IT staff, the development and running of the website, the finance aspect and customer care are based on the island.

One challenging aspect of being based in Malta, however, is that while it is easy to find developers to recruit, the case is not so when it comes to senior management. This is because the majority of these people prefer to work in the gaming industry.

Another challenge is that while Malta offers a flat 15% income tax scheme for highly qualified foreign persons who work in a company licensed by the Malta Financial Services Authority, this obviously does not apply to our industry.


Flowers can be expensive. What are you doing to make them more affordable?

When we started out, we were targeting the high-end market.

But when the recession hit in 2007, we were very quick to adapt to the new reality. We started pricing most of our bouquets at £19.99, so we had something for everyone.

Our customers feel that they get what they pay for, and for three consecutive years we were awarded the Gold Trusted Service Award from Feefo, an independent rating service that recognises businesses for the exceptional customer experience they deliver.


Certain EU member states have been pushing for a ban on weed-killer glyphosate, although its use was renewed for five years in 2017. Would a ban on this herbicide affect you?

It would not, since our growers don’t use glyphosate.

When it comes to environmental considerations, the packaging we use is made of 90% recycled material and we collect all rain water from our warehouse to water the flowers.


How is the flower business evolving and would you consider also expanding your delivery service to Malta?

We are growing every year. For this year’s Valentine’s Day, for instance, we saw a 15% increase in sale compared to 2018.

It would not make sense, unfortunately, to expand deliveries to Malta, however, because the market is too small.

Going full-on into a new market is very costly, so we are focusing on the markets at home, and we are still going strong in the UK.

 

Source: https://www.businesstoday.com.mt

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