In Full Bloom: Q&A with LVLY

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By Published On: October 11, 20190 Comments

When thinking of the perfect gift, LVLY Co-Founders, Hannah Spilva and Verity Tuck, decided to disrupt the entire industry. We sat down with Hannah to discuss the $50 billion global industry and the importance of a solid business strategy.

There are many flower delivery services in Australia. What inspired you to start LVLY? And why is it different from other companies?

The cut flower industry is worth almost $1 billion in Australia but despite being a well-established category, there’s been little to no innovation in flower delivery services for decades. Forty per cent of flowers sold in Australia are imported from around the world – flowers are in transit for weeks and sprayed with toxic pesticides which has a significant environmental impact, not to mention the fact that by the time the customer receives them they’re at the very end of their shelf life. The traditional big players operate an order-gatherer model which means they pass sales off to a large network of florists and take a clip of the ticket on the way through. There’s no quality control and consumers don’t really know what they’re getting.

There’s been a high level of customer dissatisfaction in this category for a really long time and that’s because the legacy order-gatherer model isn’t set up to make the millennial customer happy. Customers’ demands, values and buying behaviour has changed and we’re building a business specifically designed to address these needs. That means we own the customer experience end-to-end on a national scale, we manage the supply chain, we source local, we have our own floristry teams and manage the last mile. We’ve provided customers with personalisation options across the range, outstanding customer service and limited edition product collaborations with other on-trend Australian brands. As a result of our efforts, we’ve grown at 100 per cent YOY, we have a net promoter score of 87 and a healthier gross profit margin than our biggest competitors.

You’ve mentioned that you’re ‘disrupting’ the online flower industry. How are you doing this?

Our focus has always been on doing things differently, not for the sake of disruption itself, but for the sake of providing customers with an outstanding experience. In many ways, we’ve innovated simply by giving people what they’re asking for – albeit we’ve had to solve some pretty complex problems in order to do that. In addition to our same-day delivery service in Melbourne, Sydney, Brisbane and Adelaide our customers want to be able to send LVLY flowers and gifts anywhere across Australia.

To meet that demand we developed a unique packaging solution that allows us to send freshly arranged flower posies through the mainstream postal network. We worked with cardboard engineers and flower specialists from around the world to develop a packaging solution that would keep the flowers protected and alive in transit and would also allow us to safely ship our trademark glass flower jars which can be personalised with people’s names, special messages or corporate logos. That means we can offer customers next day delivery anywhere in Australia which has helped us expand without increasing our fixed cost base. The combination of personalisation and national delivery isn’t something that any other flower gifting service offers.

We look at every part of our business and constantly ask ourselves how we can be better and how we can lead by example. It’s not just about driving commercial outcomes, we’re also big believers in paying it forward and have established two initiatives designed specifically to give back to the local community and spread joy beyond our customers.

Every week we donate all unsold flower posies to aged care homes and hospices and last year we partnered with the Homie Pathway project, a program created to help get homeless youths back into meaningful employment. LVLY created an internship specifically to support this cause and we took on our first Homie intern in July 2018. 

In order to create a successful business, whether it be online or brick-and-mortar, you require a bit of experience. What past experiences do you have to help LVLY succeed?

My expertise lies mainly in brand building and digital marketing. I spent over a decade working for advertising agencies on both sides of the world, solving problems and developing strategy for clients including Adidas, Motorola, Uniqlo and Kmart. That’s definitely been useful but what’s more useful is a willingness to put yourself in unfamiliar situations and learn from them. As a business scales, you need to level up as a leader and you can only do that by pushing into new, uncomfortable spaces that force you to acquire new skills and grow. It’s that willingness to try new things and to throw ourselves in the deep end that unites us as a team at LVLY. I truly believe our success will be largely down to outlook, attitude and bloody hard work as opposed to prior experience. We’ve also assembled an incredibly experienced advisory board – they cover tech, finance, marketing, media and entrepreneurship. They’re the A-Team!

You don’t just sell flowers – you have whole gift sets available. What inspired you to branch out into these areas?

It was always part of our growth strategy to build a brand that could move into multiple product categories. Flowers and gifting go hand in hand so we’ve expanded and contracted our range over the last four years to see what works and what doesn’t. Now we’ve got the data to understand what customers really want, we’ve developed a branded range of body care products, candles, chocolate goods and organic teas. We’ve also launched an experiences range so, for example, customers can send a voucher for a massage or mani-pedi with their flowers. It allows us to stay relevant across multiple gifting occasions as well as providing upsell opportunities and the benefit of vertical margin.

Collaborations are going to be a big focus area for us over the next few years. It’s a great way to support like-minded Australian brands, test new products and drive repeat purchase. We’ve recently launched two successful partnerships with wine legends, Vinomofo and social enterprise, Thankyou.

LVLY offers same-day delivery throughout metro area sand next-day delivery in rural Australia. Do you think that these delivery standards are a demand from customers, or do you think it’s a perk that Australians are slowly becoming accustomed to, but isn’t a necessity?

It’s absolutely a necessity! On a global scale, the last mile of the supply chain is getting faster because consumers demand it. Research by PwC indicates 88 per cent of consumers are willing to pay for same-day delivery or faster – you only need to look at the success of Amazon Prime’s same-day and next-day delivery service offering to understand that consumers appetite for immediate delivery is increasing. This is further heightened in our business because often we’re dealing with customers who have forgotten someone’s birthday or need to send a last-minute gift so our ability to dispatch and deliver gifts rapidly is critical.

What challenges have you faced while creating LVLY, and how did you overcome them? Did you learn anything valuable?

Like every start-up there’s been challenges at every turn – cashflow, wastage, inventory management, logistics, tech fails, product fails, people problems. You name it we’ve probably dealt with it. It’s a cliché but the phrase ‘if you’re not failing, you’re not learning’ is so true. We’ve learned that ultimately your power is in your people, if you have the right team of people around you you can overcome anything.

As female co-founders, we’re definitely outnumbered by male-founded businesses and statistically, we are less likely to get funding. So that’s a big challenge we’ll need to overcome but personally I feel incredibly energised about helping to shift that imbalance. I want to encourage women to divert their energy from debating inequality to destroying inequality by standing up and doing.

Where do you hope to see LVLY in five years from now? Do you have any innovative ideas that you’re just aching to try?

Our immediate focus is to establish LVLY as a household name in Australia and beyond that expanding into overseas markets. We’ve already proven we have a scalable model and the global flower industry is worth over $50 billion so it’s not a huge leap to see LVLY launching into other countries. In terms of NPD, we’re currently in the process of rolling out a flower subscription product as well as new services for LVLY Weddings and LVLY Corporate. We’ve had a lot of organic interest from customers across weddings and corporate which presents a huge opportunity for growth. We’re excited to see how these parts of the business perform over the next 12 months. In addition to that, we have some exciting developments underway from a supply chain perspective but it’s too early to share the details. Watch this space!

What advice would you give to others who are hoping to start their own online business?

Starting your own business is ten times harder than you think and twenty times more rewarding. For the best chance of success surround yourself with the right people and realise that most ‘overnight success stories’ take ten years. Courage and resilience are key!

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