James Stevens: Business is blooming at Roses Only
You’d be hard pressed finding an Aussie who hasn’t heard of Roses Only. That’s not to say the hard work is done. James Stevens has found branding doesn’t end with successful marketing; there is also the continuous issue of brand protection. Going into the family business wasn’t high on the agenda when James Stevens was a young boy. Though he spent plenty of time at his father and uncle’s Sydney Town Hall station florist, he didn’t realise how much the lessons learnt on the job were going to affect his own business life.
Apart from using his experience to back his decision to open his own type of florist, Stevens learnt a lot about trust, or misplacing it, in those early days. It started with a robbery, when the naive youngster left his takings unattended for a moment and lost the lot. The high incidence of staff theft tested his trust further and, on top of marketing, is one of the reasons the Roses Only logo is emblazoned on all his products.
Trust issues aside, the man behind the hugely successful Roses Only brand is easy to talk to, and once he gets going on a subject he’s passionate about—his business—he’s hard to stop. Perhaps it’s not surprising given his signature product, long-stemmed red roses, and its association with passion.
For Stevens, the passion grows as he revisits the history of the family business. It started with his father visiting pubs and bars to peddle flowers to the husbands and partners needing a powerful gesture to offer their wives and girlfriends after a few too many drinks after work. Then came the florist set up in Town Hall station (the floor plans for which Stevens proudly displays). He noticed there were some similarities in clientele: mostly male, little knowledge about flowers, looking for a premium product for their sweetheart. Stevens sensed an opportunity. And thanks to good timing and growth in credit card use, the idea took form.
After completing a commerce degree in 1988, he went into the family business, never content to be at the mercy of a landlord and all the skilled staff shortages common in the bricks and mortar flower businesses. When they were presented with an opportunity to take up a lease in central Chifley Plaza, with low rent and free fit-out, the first store was created in 1995. Not only did he get a nice looking store in a great environment, he got access to the very market he was looking to target—businessmen with disposable income.
When a former colleague mentioned she had seen a shop in Manhattan that just sold roses, Stevens had his eureka moment. “It all dawned on me. All the issues I had ever encountered in my parents’ business were answered by this notion of a roses only business. It was simple, and in terms of inventory it was easily measurable.”
The next step was to come up with a name and a brand that people would initially know to call to place an order and eventually order via the internet.
The store was called Lush Flowers, and Roses Only was a section within that store. And thanks to some clever—if expensive—marketing, it wasn’t long before Roses Only was the name on everyone’s lips. “I wanted a name that began with the word roses. My mother-in-law was the one who said it’s got to be ‘Only’.” It was only after the name was decided upon that Stevens heard from a marketing guru that ‘only’ is one of the most powerful words in the world.
“The advent of the internet was what I immediately saw as my opportunity to stand out. If you ask most people, they think we’re an online florist only,” he says. “And I was so driven to dominate that space because I was suddenly given new technology that meant I could be at the forefront of my industry.
“It cost me a hell of a lot of money; money that I couldn’t logically say I was getting a reasonable return on investment in, because there weren’t that many online users—that’s something that’s grown over time.”
Despite these risks, he says, the business survived the dot-com crash because they were still living within their means through the stores and decided against going to the stock market to get private investors to fund growth. “I was fortunate that we were already growing the business and the brand name through normal media channels and all we did was add the fact we were suddenly online,” he says. “The difference in our success, I believe, was that we were already a trusted brand.”
There was a lot of credibility added to the brand thanks to the considerable investment in “credible”, above-the-line advertising on radio and in the Australian Financial Review to promote the brand before they moved online. “I definitely spent a hell of a lot more—almost 10 times more—in one year than we ever spent before. Suddenly we were spending in excess of $1 million within two or three years of starting the brand. Back then, relative to our turnover, it was a massive punt.” And it’s paid off in spades, but the wiser business owner says he wouldn’t do that again. “I think I was just stupid.”
Marketing & Partnerships
However, marketing is key for the business, and Stevens says the brand is its biggest asset. By pushing his branding harder and faster than he admits was probably not always wise, he knows if his head office building burns down today they can still do business the next day.
Part of this is thanks to the partnerships he has made with other brands to promote his own product; most of which have worked, some of which he says tarnished the brand to a degree. “Partnerships were initially created to align ourselves with other products,” he says. “The first store in Chifley Plaza was meant to be upmarket, it was in an upmarket centre, it was surrounded by high-end tenants, and so we targeted busy, suited men with credit cards.”
At the same time, it was about making roses more affordable, but the pitch, Stevens says, had to be upmarket. This is where it was important to associate the brand with other complementary brands from the start. Moet and Chandon and Lindt chocolates (before they became available in supermarkets) were chosen as recognised market leaders of upmarket products. “We owe a lot of our success to picking the right media partners, then picking the right strategic product alliances,” he says. “There was a natural synergy with the giving of flowers and champagne and chocolates and perfume,” he says. “It was all about things that go within the box.
“We aren’t here to compete with your average flower shop, but we are here to provide you with the finest quality flowers that we can pack simply in a box, and deliver.” That box, now synonymous with the brand, also plays a part in the logistics of the delivery. The shape not only makes it easy to store the flowers without risk of damaging them, they stack neatly in the back of a courier van or truck for easy transportation.
And delivery is the key. Although there are currently three stores, Stevens clearly distinguishes the brand from ‘cash-and-carry’ stores and the emphasis is on remote ‘call or email and we deliver’ business. They’ve even had software designed to determine delivery times. For example, if a customer wants a guaranteed morning delivery, the software will immediately tell them what the earliest possible delivery time is.
While they can deliver anywhere in the world, the brand is recognised in Australia, New Zealand, and the UK. The Australian office handles the call centre for New Zealand customers, with local partners filling the orders. In the UK, most orders are handled at the head office, but calls outside eastern and western standard time are handled in the UK, in real time, as are their online orders.
Getting a fresh product like flowers and fruit (Fruit Only was added to the brand late last year) from the growers to the customers would present challenges for any business, but it’s amazing just how much travel these flowers have to do and still look good.
As Stevens offers the five-cent tour of the Sydney base, he points to the boxes of flowers that have been shipped from Ecuador. Noticing my surprised look, he tears into the box and waves me in for a closer look. Sure enough, there are dozens of mainly perfect buds looking as fresh as daisies (pun intended).
While he’d prefer to buy from Aussie growers all the time, to support local growers as much as for freight savings, seasonality limits availability and he recently made the decision to import flowers from overseas, including from South America and Africa.
Now it is no big deal for Stevens, who explains that it takes about three days, from the moment he places an order for overseas product, for it to arrive in his workroom. This includes passing through Customs and being fumigated in quarantine. “We use airfreight for everything.” There are occasional problems when a shipment is accidentally unloaded on the tarmac in Dubai and the 50-degree heat destroys the shipment, but he takes it all in his stride.
Putting in place tight quality control means the flowers tend to be in perfect shape when delivered to customers. The quality of the flowers sent to customers is rarely a problem, Stevens says. “We have more problems with the chocolates!” he jokes. Although there are occasional problems he works to correct these by ensuring his staff are well-trained to provide only the best quality.
He also includes reply-paid customer comment cards with each delivery, which he checks every day. The only negative in the batch he shows me concerns a delivery driver spoiling the surprise for one customer. Although he provides these cards, and gets a fairly good response, Stevens has a number of willing ‘mystery shoppers’ to help him gauge the quality around the country. “And we gauge a lot by virtue of the reply cards.”
Most of the complaints he receives are more concerned with the logistical issues of delivery of the flowers. He uses a mix of his own drivers and courier companies, but other partner florists he uses around the country have to use their own delivery methods, which makes it hard to control. Establishing rules to pass on to the partners is a starting point.
Despite infrastructure problems in the freight industry, Stevens doesn’t let too many of the logistical issues with our road systems concern him. “Things that concern me more are quality issues,” he explains.
“There’s a central distribution system in every [major] city,” he says, with warehousing for peak periods, such as Mother’s Day and Valentine’s Day. And when he receives orders outside major cities, the nearest partner florist fulfils the orders using the Roses Only packaging.
Transporting stock around Australia is done largely on trucks, with the fresh produce freighted in refrigerated trucks. Rising fuel costs aren’t bothering him too much, either, thanks to economies of scale. “There’s a mass of deliveries to one suburb as opposed to spreading deliveries.”
What does slow things down in the supply chain is shipping flowers from the eastern states to Western Australia or Tasmania. Due to state laws, the flowers have to be quarantined and fumigated before crossing these borders, and this can mean delays.
Hard Lessons in Buisness
Thanks to his father and uncle’s experience, (his dad is still a 50 percent silent partner in the business and they bought his uncle out), and with all the effort to get the brand into the public arena, Stevens is adamant about protecting his intellectual property. As well as registering the business names and protecting logos, he has also registered domain names, and similar names, “just in case”.
All the registrations in the world mean nothing, he admits, if you let them lapse, as he discovered recently. A ‘cyber squatter’ picked up a lapsed domain name and tried to sell it back to Stevens for $25,000, and when Stevens refused to negotiate, one of his competitors took it up. Things got a little nasty for a while before Stevens prevailed, with help from domain name authority auDa, but it’s one lesson he’s learnt the hard way.
He advocates a cautious, ‘slowly, slowly’ approach to getting into new markets, another tough lesson for him. “I was stupidly thinking the take-up of the brand would happen quicker in new markets we entered. The classic case is Melbourne, which has taken a lot longer than we’d thought to get to where it is now. And in markets like the UK, where I took it for granted that it was just going to happen, that’s cost a lot of money—but we’re not giving up on the dream!
“I would start any new distribution business in a smaller rather than larger market—get it right in the smaller market and then slowly grow into those bigger markets. Which is why America will be the last frontier.”
As president of Sydney’s Entrepreneur Organisation, Stevens uses this role to pass these lessons and experiences on to others in his group, as well as being surrounded by like-minded entrepreneurs he can learn from at the same time. “My peer group has taught me a lot about things other than work, or put things into perspective for me, possibly quicker than I might have discovered them myself.” And this, he adds, has taught him more about work–life balance and staying healthy. “I hate missing the kids before they fall asleep, and I feel very guilty if I do that.”
With 50-odd staff members in the head office, from call centre staff through to the marketing team, Stevens says he has put the best team together and it’s one that he doesn’t believe his competitors can rival, in sheer size and organisational structure. “I would love to keep [them] for a long time.”
Summing up his own role in the business, Stevens says he “keeps it going”, through generating ideas as well as being a sounding board for staff ideas, good and bad ones. “As an entrepreneur it’s one of the hardest things to come to terms with–you need to let your team experience failure and ‘see for themselves’.”
Even after all these years, seeing his product on the street still fires his passion. “The biggest thrill is seeing a girl carrying one of my boxes through town. It’s that box that tells people someone’s gone to a lot of trouble for me.”