John Tabis, CEO of The Bouqs Co, believes that the consumer brands that are going to win are the ones that are where customers want them to be. That is why he thinks of Bouqs as much more than just an e-commerce company, with plans to be in retail and anywhere else a customer might want them to be. I sat down with John to talk more about the journey of Bouqs, his viewpoint on business models, and how launching a brand has changed in the last decade.
Dave Knox: Let’s start with the origin story of Bouqs. How did the company come to be?
John Tabis: This whole thing started with my good friend, Juan Pablo Montufar, at the University of Notre Dame. Born and raised in Ecuador, his family was in the floral business. Even as a teenager, he had a passion for floral and he had always planned to move back to Ecuador and run a flower farm at some point in his life. He and I started talking about the pain that he was having as a farmer in the industry and I identified a lot of pain points on the consumer side. I learned about his business and where he was struggling, and I thought more and more about the category and the lack of a true large aspirational brand in the space. We put our heads together and said, “Hey, let’s try to build a solution here that actually fixes it for the farmer and for the customer”. And that’s how we got started.
Knox: When you think about the business today, are you an e- commerce company, a technology company, a consumer brand, or a mixture of the three?
Tabis: I think people perceive us as an e-commerce company. The real foundation of the company is the technology and the data, because what we’re really doing is we’re taking a perishable supply chain and streamlining it. In floral, there are five or six layers typically between the farm and the consumer. We have shrunken that down to one layer, which is the Bouqs supply chain logistics system. That technology platform and the data are really the basis of the business.
But that is only part of it because what it enables is a just in time, real time supply chain and logistics network that moves those flowers around the country and eventually around the world in a way that’s just much more efficient than anyone else, at scale. I think of us as a supply chain logistics company as well. If I was gave us percentages, I’d say we’re 50% a data and technology company, 25% a supply chain logistics company and 25% an e- commerce company But long term, ultimately what we will be is just a really big floral brand, and all the rest is as a means to that end.
Knox: Diving into that supply chain side, the flower industry, in the very seasonal with peaks around the big holidays of Valentine’s Day and Mother’s Day, etc. What unique opportunity did you guys see when you thought about approaching the industry different to avoid those peaks and valleys around?
Tabis: The way we think about it is the relationship with our customers shouldn’t be once or twice a year. If that’s the case, then we’re not doing a great job because there’s many other reasons to buy flowers. What we want to be is a brand that is there for people year round. But the reality is if you can’t handle a really big spike at a Mother’s Day or Valentine’s Day, then you can’t be there for your customers when they really need you as well. It’s building a brand and a relationship with a customer where they say, “Hey, I want to use them year round. I want to make them a partner,” and we’ve actually made that sort of the linchpin of what we do. We have invested pretty heavily in the past six months in our subscription service and we introduced it to every customer as 30% off plus free delivery if you sign up. We give them flexibility to skip it and send it to one person one month, themselves the next month, or somebody else the next month. They can use it in that way to really be a tool to help them just gift in a better and more efficient way. And that’s great for the customer and that’s great for us.
Our ultimate goal for the company though is not to be a gifting floral e-commerce company. Flowers play this massive important part in our lives. We are born and our parents get flowers, we achieve something and we get flowers, we go to prom, we either get or give flowers, we get engaged, flowers, we get married, flowers, we have babies of our own, we get flowers and we die and there are flowers there. This product is really genuinely a part of our lives the entire way. And as a brand today, we play in some of those places, but we don’t play in all of them. And we really want to be that brand that people think about across any of their needs, whether they’re getting married, whether they have a business and they need flowers for the front waiting room, or within the office. But ultimately we want to be that brand that people think about and go to for all of those occasions. We want this supply chain and logistics platform that we’ve built, which is super powerful, to serve customers in a much broader way.
Knox: What impact has the current environment had on Bouqs?
Tabis: We’re seeing a surge in interest in the category. And I think that’s for a few reasons. First, people were very used to traveling places to visit people. Those are just not options anymore. So people are looking for a way to be there without being there, and sending a gift is often what people think about. Second is that people just want to be connected. And in times of crisis where we are all struggling – personally, professionally, economically, or other ways – people want to be connected and kindness always comes out. We always say internally, “kindness always.” But I feel like in this time, at the end of the day people revert to kindness.
We’ve seen a pretty nice increase in our business at a time where a lot of businesses are struggling, which I talk about with my team is a very strange place to be. We’re thrilled to be there for our customers and that people want to send kindness and they want to use flowers to do it. That’s an amazing thing. But it’s also really weird to have a business doing as well or better at a time when so many businesses are struggling. It’s a weird cognitive dissonance. As a company we are just trying to do our best to help people feel connected and to honor one another and to honor their personal connections at a time when it’s harder to do that than ever.
Knox: In the early days, you pitched on Shark Tank. How do you think the landscape has changed since then when it comes to launching consumer brands?
Tabis: It’s certainly a very different world. When we came out with this business, Shopify didn’t exist. The amount of investment, development, and building of tools for launching consumer brands has proliferated so much since we launched. There are dramatically more brands, not just in our category but across all categories because the barrier to entry has just gotten smaller and smaller. When we launched Bouqs we had to hire a developer, build all the tech from scratch. Today you can get somebody who can sort of point and click with a mouse for a mobile app through a company or go through Shopify or a myriad of other number of tools. It just makes it easier.
The barriers to getting something up and running are lower but the barriers to scale remain there, and they’re significant. This is what I say to anyone who wants to start a consumer brand. If you can’t get to a million dollars revenue, you have no right to be in the game whatsoever. Getting to a million bucks a year should be super easy if you have any kind of chops. But going from a million to a hundred million is a heck of a challenge, because of all the things that come with it. How do you acquire customers at scale? How do you service customers at scale? How do you handle technology and order routing and customer service and data management. All these things are really hard and there aren’t off the shelf easy tools for that. That does not exist. You have to build, you have to raise money or be able to create enough revenue to build those things yourself. And it’s why you don’t see a lot of companies that grow to 100, 500, 1000 employees in consumer, because the game is just really hard. But for those that can get there, the world is our oyster because there’s no one else that’s gotten there. So there’s a lot of opportunity if you can get through what I call like the teenage years for any given company.
Knox: On that note of scale, how do you think about the choice of staying true to the business model of e-commerce or moving omnichannel with physical retail?
Tabis: The consumer brands that are going to win are the ones that are where customers want them to be. If they only want them to be online, then being a direct consumer only brand makes sense. But a lot of customers don’t only shop online, they don’t only exist online. You have to know what the customer wants and you have to serve those needs. I think a lot of brands came into this game saying, the future is only online because this next generation is only going to want to shop online, and that just isn’t true. Millennials and post-Millennials, they go to stores and they shop. They like the social nature of shopping. They like touching and feeling things. So you’ve seen a bunch of different approaches to it. You’ve seen own stores, you’ve seen Bonobos launch guide shops, which are sort of smaller footprint stores. You’ve seen Harry go into Target, you’ve seen expansion of digital brands and third party retailers. You’ve seen brands go into Amazon, and ultimately have to find out where your customers are and what they want. In our business, we talked announced our own plans for going into retail and its not just because we just think it’s what’s next. It’s because when you look at what the customer is looking for and the services they want, like consultative services for a wedding, customers have demands for these things and we want to be able to be there for our customers every time they need flowers. So that means we have to be in those places. Now we announced that and then a global pandemic hit that sort of essentially killed all retail, because we all have to stay home. So the timing of that may shift, but that’s certainly what we see as the future is. If you have customer needs that can be better satisfied by being in all those places, you should be. As Amazon went from being digital only to now having stores and Walmart sort of went the other way, you’re going to see that same trend happen at businesses big and small, and those that don’t get to where their customers need them to be just aren’t going to win.