Why are there so many flower shops in train stations? The “Surprising Reasons and Convincing Secrets” for the “Impulse Buying” that makes stations so profitable.
I have been curious about this for some time, but it seems that I often see flower shops at train stations.
To begin with, the standard stores in stations are standing noodle shops, convenience stores that used to be kiosks, and cafes where you can kill a little time. They are places where people can stop for a few minutes to do their business while on the move, and are a convenience that is hard to do without.
Flowers, on the other hand, are only in demand for limited occasions such as weddings, funerals, and store openings. It seems to me that there are not many occasions during the year when you would need to rush somewhere with a bouquet of flowers in your hands. I was curious, so I did some research.
It seems that Aoyama Flower Market (AFM) is the main store in the Tokyo metropolitan area. Of the 121 stores it operates in Japan, 100 are located in train stations. So, is it actually thriving?
The overall size of the flower market, the market for ornamental plants such as flowers, fell below 1 trillion yen in ’16, and furthermore, the COVID-19 crisis has caused a decline in events and functions, so the market is struggling. However, AFM sales have increased 40% from 7.4 billion yen in ’16 to 10.5 billion yen in ’22.
Why are flowers selling so well at the station? We asked Atsushi Karl Hirano, a management consultant.
What is very unique is that they are focusing on private demand. The main demand is not from corporations, but from the general public who buy low-priced bouquets in glasses.
The way the flowers are arranged in the store is also very creative. While most flower shops display flowers by type, AFM seems to be very particular about its displays, for example, if the flowers are yellow, only yellow flowers are collected and displayed in groups by color. The store is so particular about its displays that customers passing by may take a quick look and make an impulse purchase.
Even if you don’t intend to buy, when you see a beautiful flower at the station, you may end up buying it, right? I think that this kind of impulse buying, or pulse consumption, has been successfully captured. This is something that can only happen at train stations. The price of a glass-size bouquet, for example, is about 500 yen, which is just the right price to make people want to buy it.
In other words, the presence of the beautifully displayed store itself has a certain advertising effect at a station, a place with a lot of traffic. However, in such a location, everyone naturally wants to open a store, and rents for stores are also high. This means that the shop must generate more sales in the smallest space possible, but AFM has managed to overcome this problem.
The station location is suited for thin profit margins because of the rapid turnover of customers. The size of the store is about 3.5 square meters, but we have a system in place that allows us to make a good profit with that space.
Ordinary flower shops have refrigerators to keep flowers fresh, but AFM does not. Instead, it sells off flowers that have been pre-made into bouquets before they are damaged. The fact that we are able to open new stores is probably due to the fact that we are thoroughly reducing costs by cutting fixed costs and lowering the waste rate,” says Hirano.
Even a store with a floor space of only about 3.5 square meters can generate a large profit if it is filled with a lot of wisdom and ingenuity. Sometimes you may even want to buy flowers for yourself to take home.
