Calyx Flowers

In 2015, after long aspiring to be a business owner, Candace Dubrow became the president
and CEO of Calyx flowers. She and her husband, Logan Russell, had finally decided that it
was time for them leave their “cube office” jobs and go out of their own. Because of their love
for nature and natural beauty they purchased Calyx Flowers and sought to revamp the
business which had been seeing a nearly 20% year-over-year sales decline. While they were
excited to finally have a company that they could run together, they knew that they needed to
quickly improve Calyx’s efficiency and combat the declining sales as their own funds and those
sourced from traditional bank financing was running low.

Company History

Calyx Flowers (previously Calyx and Corolla), was founded in 1988 by Ruth Owades, a
Harvard Business School graduate. Calyx & Corolla pioneered the concept of shipping
flowers directly from the grower to the recipient. Calyx Flowers has arrangements with
growers around the world. Certain varieties of fresh cut flowers, less commonly found in the
United States, are flown in from farms in Ecuador, Colombia, and Holland to the growers'
warehouses in the United States. After being received via phone or their website, the orders
are transmitted directly to the grower, where the flowers are arranged and packaged for
shipment, along with a personalized greeting card from the sender. The flowers are then
placed in cardboard boxes that are shipped directly from the grower's warehouse to the
receiver. The majority of packages are shipped via Federal Express, using either overnight or
two-day service (see Exhibit 1). This delivery method substantially reduces the elapsed time
between when fresh flowers are cut and when they are delivered to the recipient. As a result,
Calyx flowers tend to last longer than those offered by traditional florist delivery services.

The Floral Distribution Industry

Most flowers are purchased on special occasions—birthdays, anniversaries, Valentine’s Day,

Mother’s Day, weddings and funerals—as well as to alleviate guilt and for home or office
decoration. Customers purchasing flowers care about a variety of factors, such as longevity,
variety, presentation, speed of delivery, and price. The demand for flowers is seasonal, with
high peaks around holidays. The perishability of flowers and seasonal demand make efficient
distribution crucial for the industry. For Calyx Flower’s competitors, the distribution process
typically begins with growers selling flowers to distributors, who then resell them to
wholesalers who in turn sell the flowers to retailers. Retail competition in the floral industry is

This case summary is based on the case study by Alexander Chernev, Calyx Flowers: Managing Profitable Growth. It was
summarized and updated by Stephanie Chen (Assistant Professor of Marketing, London Business School). Some names and
figures have been changed or disguised to protect confidentiality.
London Business School cases are developed solely as the basis for class discussion and are not intended to serve as
endorsements, sources of primary data, or illustrations of effective or ineffective management.
© 2021 London Business School. All rights reserved. No part of this case study may be reproduced, stored in a retrieval system,
or transmitted in any form or by any means electronic, photocopying, recording or otherwise without written permission of London
Business School.
fragmented, with competition that includes retail florists, 1-800-FLOWERS.COM, FTD, and
supermarkets.

• Retail florists are one of the most popular outlets for the distribution of flowers. Retail
florists prepare custom bouquets and usually provide flower arrangement services for
special occasions and events. Many florists deliver on weekends and holidays in
addition to regular business days, usually for an additional fee.
• 1-800-FLOWERS.COM is a large flower distributor in the United States. The
company advertises extensively through television, print, and billboards. Orders may
be placed by phone (1-800-FLOWERS) or online (1800FLOWERS.COM and
FLOWERS.COM) and are then transferred to the closest retail florist. The company
relies on a hybrid fulfilment system that includes a network of approximately fifteen
hundred florists around the country, as well as its own distribution and warehouse
facilities.
• FTD (Florists’ Transworld Delivery) is the largest floral company in the world,
connecting approximately twenty thousand North American retail florists and
accounting for about 10% of all floral sales. FTD receives orders from customers
through a toll-free number (1-800-SEND- FTD) or online (FTD.com) and then
forwards each order to the florist nearest to the recipient.
• Supermarkets offer flowers at prices substantially lower than those of other floral
distributors because they purchase flowers in bulk directly from growers and
distributors. While they offer lower prices than florists, most supermarkets do not offer
the same level of flower variety and service. Moreover, flowers in some supermarkets
are not kept at an optimum temperature, which affects their freshness and longevity.

Calyx Flowers

Calyx has a wide variety of fresh flowers, plants, vases, and other floral accessories. A
typical order averages $80, excluding shipping charges of about $16.95. Continuity programs
are another important part of Calyx Flowers’ marketing efforts. One of the most popular
programs is “Year of Flowers,” under which flowers are shipped to the customer-designated
recipient once every month.

In the past, Calyx Flowers promoted its offerings primarily through the ten million catalogs,
ranging in size from thirty-two to forty pages, mailed every year. Of the ten million, four
million were mailed to prior customers (six catalogues per year), one million was sent to
flower recipients (six catalogues per year), and the rest of the catalogs were sent to rented
mailing list names, selected because their demographics were similar to Calyx Flowers’
current customers, most of whom were upscale professional women. The costs of producing
and mailing the catalog were $.74, in line with the industry standards. The yields varied
depending on the recipient group: current customer mailings yielded around 4.5% response
rate, while recipient and rented mailing lists yielded around 1% (per mailing).

Revamping the Business

One of Dubrow’s main goals was to give the company a greater online presence. She and
Russell had rebuilt the website, moving more of the ordering online, and launched digital
campaigns. The result of these campaigns mirrored those of the catalogs campaigns. A
recent Facebook campaign that re-targeted their former customers yielded a conversion rate
of approximately 1%, about three times higher than that of a similar campaign targeting new

© 2021 London Business School. Page 2

customers with a similar demographic profile to their current customer base. This was
particularly troubling as the ROAS (return on ad spend) was close to zero for the new
(prospective) customers.

As Dubrow looked over the results of the new campaign, she wondered how she could make
the campaigns more appealing to her customers. A number of questions were running
through her head. Did Calyx need new ad content to drive sales? Did they need new outlets
for their ad campaigns? She knew that Calyx didn’t have the resources to continue to launch
campaigns that had almost zero return but also new that they needed to find new customers
to increase sales. To ensure the future success of the company, she needed to identify a
strategy that was have a significant impact on Calyx’s financial performance.

© 2021 London Business School. Page 3

 CALYX FLOWERS: MANAGING PROFITABLE GROWTH

Exhibit 1: Calyx Flowers Service Information Sheet

 
 
 

The Calyx Difference Call  our  Calyx  Concierge™  Service  1.800.800.7788  For  Ex-­‐
 
pert  Ordering  Assistance  24  hours  a  day,  7  days  a  week.    
Fresh  from  the  Fields   Or  order  online  at  CalyxFlowers.com    
 
Calyx  Flowers’  fresh-­‐cut  bouquets  and  lavish  plants  are  
SUBSTITTUTIONS  &  ORDER  CHANGES  
sent  directly  from  the  world’s  premier  growers,  guarantee-­‐
If  a  particular  flower,  plant,  or  color  choice  is  not  available  for  
ing  freshness  beyond  compare  and  exotic  varieties  you  
shipping,  we  will  send  a  fresh  selection  of  equal  or  greater  
won’t  find  anywhere  else.  
value.  We  are  happy  to  accommodate  changes  to  your  order  
 
whenever  possible;  however,  once  an  order  is  en  route,  we  
Exclusive  Designs  
are  unable  to  change  the  order  or  stop  delivery.  
Our  talented  floral  designers  find  creative  inspiration  in  all  
 
parts  of  the  world,  and  every  Calyx  bouquet  is  crafted  to  
GIFT  CERTIFICATES  
showcase  the  distinctive  beauty  of  every  bloom.  
The  gift  of  choice  is  often  appreciated  more  than  any  other.  
 
Gift  certificates  are  available  in  denominations  of  $50  or  
Exquisite  Vases  &  Cachepots  
more  and  are  sent  in  decorative  presentation  packages.  
We  are  renowned  for  the  exquisite  cases  and  cachepots  we  
Please  call  to  order.  
find  to  complement  our  luxury  offerings.  From  handcrafted,    
hand-­‐painted  ceramic  to  contemporary  printed  glass,  our   Corporate  Gift  Giving  Made  Easy!  
unique  vessels  make  our  gifts  truly  extraordinary.   Our  Corporate  Group  is  ready  to  make  your  Business  Gifting  
  needs  as  simple  as  our  gifts  are  beautiful.  Show  your  thought-­‐
Patented  Packaging   fulness  with  one  of  our  exclusive  wreaths,  luxury  bouquets  or  
To  ensure  your  fresh-­‐cut  flowers  arrive  in  perfect  condi-­‐ blooming  plants.  To  learn  more  about  our  volume  discount  
tion,  they  are  carefully  packaged  according  to  each  varie-­‐ please  call  or  email  us.  We’ll  happily  work  with  you  and  your  
ty’s  unique  needs.  Our  specially  designed  Weather  Wrap™   company  to  meet  your  every  need.  
by  Airliner®  surrounds  your  bouquet  in  a  protective  cush-­‐  

ion  while  temperature  packs  maintain  ideal  conditions   1.800.497.6789  or  Business@CalyxFlowers.com  
 
during  transit.  Your  flowers  arrive  as  exquisite  as  the  mo-­‐
SHIPPING  INFORMATION  
ment  they  were  picked.  We  guarantee  it!  
Delivery  Restrictions-­‐  We  regret  that  we  cannot  deliver  to  
From  bud  to  bloom   Alaska,  Hawaii,  Puerto  Rico,  outside  of  the  United  States,  or  
Our  flowers  are  shipped  to  you  while  they're  still  in  bud;   to  APO,  FPO,  or  PO  Box  addresses.  Fresh  product  deliveries  
this  ensures  that  your  flowers  will  last  as  long  as  possible.   cannot  be  made  on  Sundays  or  Mondays.  
 
Within  a  few  days,  the  petals  will  begin  to  open  and  fresh  
Protective  Packaging-­‐  All  of  our  bouquets  are  delivered  in  
blossoms  will  emerge.  The  flowers  exhibit  a  great  deal  of  
protective  boxes.  For  added  protection  during  shipment,  
vitality,  just  as  they  would  if  they  were  growing  in  the  gar-­‐
some  bouquets  and  vases  will  arrive  in  separate  boxes.  
den.  After  a  few  more  days  have  passed,  your  blossoms    
will  be  a  full  bouquet  that  will  last  for  quite  some  time.   Future  Delivery  Dates-­‐  We  are  happy  to  take  orders  for  
  future  dates.  For  special  events,  we  recommend  having  
First-­‐Class  Customer  Service   products  delivered  prior  to  the  date  in  order  for  them  to  
When  you  place  an  order  with  Calyx  Flowers,  you  are   rehydrate,  for  buds  to  open,  etc.  Whenever  possible,  we  
treated  to  the  first-­‐class  customer  service  for  which  we   will  deliver  on  the  exact  date  you  choose.  
have  become  known.  From  helping  you  choose  the  perfect    
floral  gift  for  any  occasion  to  ensuring  your  absolute  satis-­‐ STANDARD  SERVICE  (per  item)                                        …$16.95  
faction,  we  are  here  to  make  sure  your  gift-­‐giving  experi-­‐ Fresh-­‐Cut  Flowers,  Plants,  &  Perishable  Food    
ence  is  quick,  easy,  and  carefree.   Items:  2-­‐Day  or  Overnight,  depending  on  the    
  need  of  the  product  being  shipped  
Our  100%  Satisfaction  Guarantee   Preserved  Floral  Gifts  &  Nonperishable  Food    
Calyx  Flowers  has  been  delivering  the  finest  floral  gifts  to   Items:  Approximately  7  business  days.  
happy  customers  since  1988.  We  take  great  pride  in  offering   RUSH  DELIVERY  (Tues.-­‐Fri.)                            …add  $10.00  
attentive  service  and  fabulous,  fresh-­‐cut  flowers  to  you  and   SATURDAY  DELIVERY                                                              …add  $10.00  
all  the  deserving  people  in  your  life.  We  know  how  im-­‐ “YEAR  OF”  PROGRAM  DELIVERIES        …$11.95  

portant  your  Calyx  Flowers  gift  is  and  we  stand  behind  it   (Per  monthly  shipment)  
100%.   ©2007 by Calyx Flowers
 

 
 
Source:  Compiled  from  Calyx  Flowers’  promotional  materials  
 
 

© 2021 London Business School. Page 4