UrbanStems uproots the floral industry

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Ajay Kori was in a long-distance relationship and sent a lot of flowers, but too many bad experiences when ordering online got him thinking there had to be a better way. He devised a brand-new supply chain, from the growing process through delivery within hours of an order. “There’s something wrong with the way this industry is structured,” Kori says, so he established UrbanStems with a strong focus on the customer experience.

Kori, co-founder and CEO of UrbanStems, joins Retail Gets Real to discuss how the startup is upending the online flower industry — and how it turned a disastrous Valentine’s Day into an advantage.

Ajay Kori (left) joined hosts Ana Serafin Smith (center) and Bill Thorne (right) in the podcast studio.

Ajay Kori (left) joined hosts Ana Serafin Smith (center) and Bill Thorne (right) in the podcast studio.

In an industry dominated by large players following the same model, UrbanStems decided to own the process from bulb to bouquet. The company designs the flower arrangements first, then sends those designs to their own farms in Mexico, Columbia and Ecuador where the flowers are grown. Bouquets are arranged in the farms and shipped directly to UrbanStems’ distribution centers, a process that allows for delivery to customers within hours of an order. Kori says the flowers also last longer, having been cut off the stems only a few days earlier.

Traditional competitors rely on holidays like Valentine’s Day and Mother’s Day for a big part of revenue, but for UrbanStems, these holidays bring a much lower 10 percent. The startup’s revenue mostly comes from orders for birthdays, congratulations and sympathies.

Those high-impact holidays are still some of the busiest times for UrbanStems. On Valentine’s Day 2017, the company received many more orders than it had anticipated. Although the team had prepared for high volume, the only fixed constraint — space in urban centers — brought them down. “We completely screwed up,” Kori says. Deliveries were delayed because couriers couldn’t find completed orders; by close of business, it was all hands on deck. Every employee including the founders stopped their jobs to deliver flowers well into the night and over the next few days.

The startup went to drastic measures to salvage its image, and Kori took no shortcuts. Listen to the episode to hear how UrbanStems turned the Valentine’s Day disaster into an event that earned back those customers — and then some.

Subscribe to Retail Gets Real for more high-impact stories. Coming up, the President of Levi’s talks about how the century-old brand stays relevant, and Forrester Research discusses how retailers are investing in 2018.

Ana Serafin Smith is a co-host on NRF’s Retail Gets Real podcast. Meet all the co-hosts and learn more about the show.