Mother's Day flowers to come with a bigger price tag this year

American families are expected to spend up to $38 billion on Mother's Day this year, according to the National Retail Federation (NRF), $3.2 billion of which will go toward buying flowers.

UrbanStems CEO Meenakshi Lala discusses broader consumer spending trends, especially for these sentimental holidays, while Americans navigate the K-shaped economy.

Americans are expected to spend a record $38 billion on Mother's Day this year. It's according to the National Retail Federation with the most popular gift being flowers. But with headwinds like rising fertilizer prices, a harsh winter and tariffs make that bouquet cost a little more this year. Joining me now on this is Minakshi Lala, the CEO of Urban Stems. Minakshi, it is good to see you. So, Mother's Day this weekend, Minakshi, you know, how how important is this for your business? Is this, is this kind of like the, is this the Super Bowl for the floral business, Minakshi?

Hi Josh, thanks for having me. Mother's, Mother's Day absolutely is the Super Bowl for the floral industry. Uh, between Mother's Day and Valentine's Day combined, these two moments alone account for over 50% of the annual flower sales in the United States.

How, walk me through what it's just like behind closed doors of your business? Like how, what does it actually look like? Is it just all hands on deck, total crunch time?

It absolutely is. I am dialing in from Hville Maryland, which is one of our largest fulfillment centers, distribution centers um in the United States. And um, you know, with with the product we deal with flowers, it's interesting. The lead up is uh probably typical to other product categories where you plan, you forecast. However, um end to end from the time the product, from the time the flowers leave the farms to your coffee table, it's a 21 day end-to-end cycle. So once the product lands into our fulfillment centers, we have five days. So this week um is is the big week for us and with consumers really relying on last minute shopping, we see 60 to 70% of the purchasing happening in the week of Mother's Day.

I wanted to ask you that Minakshi. Do most people, do they get ahead of this or no, they wait until the last minute.

They absolutely wait until the last minute. I often joke, uh hence all the gray hair uh that I have, but um, you know, consumers are about um ease and efficiency and um what we call the Amazon effect. Customers are used to purchasing product close to demand and we are seeing um, you know, Mother's Day shoppers replicate that same behavior that we see them replicate for other holidays as well.

Minakshi, we're always looking for lines of sight into the consumer and you certainly have that, a unique line of sight. What do you make of the consumer right now? Broadly, how are they doing Minakshi? Would you say resilient, stable, what do you see?

Um, you know, we're seeing a bit of a mixed bag. We're seeing a little bit of everything. We're seeing the K-shaped economy behavior. We're seeing that consumer is very consistent, um they're higher income consumers, they're spending, in many cases spending more. They're buying flowers and caviar, flowers and wine, flowers and cooking, cookies and really adding a lot of high priced um items to their checkout. Um and on the other hand, we are seeing uh the opening price point customer that is struggling with purchasing. They're more price sensitive and and they are pulling back and we are seeing that behavior in shopping.

Or I'm interested, Minakshi, are you seeing more evidence of consumers trading down? And in your business, what what does that actually look like trading down when it comes to flowers?

So, you know, um that's interesting. We're seeing two extremes as I said that uh that consumer, the higher income consumer is adding and trading up, adding caviar to flowers, adding alcohol to flowers. and um the consumer, the more price sensitive consumer is trading down. They are react, they are going towards more of the opening price point skews. They're going towards plants and not flowers, um which are more affordable and the lower end of the um, you know, segment. So we are seeing a little bit of both, um but um, you know, I think given the state of where we are as an economy, that's expected and hence the assortment that Urban stems has put out, uh reflects a little bit of both. Uh we have an offering for our customers at every price point.

What's the average spend, Minakshi?

Um so the average spend around this time period is about $130 to $140. Um which is pretty high. And on the higher end, with the um, with the additive categories that I mentioned, we're seeing consumers have basket sizes almost as high as $200.

Walk me through your supply chain Minakshi, where do you source flowers from?

We source flowers from 13 countries around the world and the intent of doing that is to bring the best of the world uh to your coffee table, to our consumer's coffee table. Urban Stem's model is built around working with farms um around the countries that produce the best of uh of the floral variety. So your roses from Ecuador and your sunflowers from Colombia and the peonies and tulip from Holland.

Have you had to navigate the tariff dynamic, Minakshi?

Yeah, absolutely. tariffs has been front and center uh for for a full year. uh and they're a constant, you know, variable in the global supply chain, but for us in flowers, they're a catalyst for agility because we source from 13 countries around the world, we have to constantly pivot our supply date, supply chain in real time to farms that offer better pricing at scale. Um and the goal is not just to avoid the tariff, uh it's to ensure that the cost of the tariff does not get passed to the customer and to the customer's coffee table.

What about rising fuel costs, Minakshi? Um I'm curious how you're dealing with that. Are you raising prices in response? Are you taking a margin hit? How are you navigating it?

Yeah, a little, you know, a little bit of both. Fuel surcharges especially in a product category like flowers, um, you know, causes a huge impact. Um as we know fuel costs are record high right now. Um and we are, however, we are rooted in our operational efficiency rather than passing the price hikes to the customer. We are trying to optimize our delivery network and our supply chain networks to minimize the impact of what uh fuel does to consumers. Um but we do have a reliance on big box carriers like FedEx uh to ship our product and we are seeing high surcharges um in those channels.

Why buy flowers online, Minakshi? You know, you've always got the local floor shop, you got the grocery stores. What's sort of the advantage of that direct to consumer model?

Yeah, absolutely. So, um, you know, the local florists do a wonderful job in a certain geography. So if you are sending flowers in your local neighborhood to someone who lives down the street from you, great. You can call your local florist and order your flowers. Um, but when you have mom living in um, on a different coast or mother-in-law living, you know, in another city, uh, in the country. And if you want the consistency of product, the experience of picking um, a gift experience for them online and then having that delivered to them across the board in six cities, seven cities, 10 cities, you know, depending on who you're gifting to, that consistency comes from e-commerce delivery providers, especially at urban stems. We take a we design our product with our in partnership with our farms and take a position on that inventory. So we are selling you exactly what you're seeing. What you see is what you get here at urban stems.

Final question, Minakshi. Maybe a viewer's watching right now, right? Uh, they're late, they haven't ordered yet. They're behind the ball. What's your advice?

Uh, my advice is order fast. Urban stems is in market until 9:00 p.m. Eastern tonight for nationwide delivery and um until Sunday afternoon in select same day cities. And my advice to you is mothers uh carry an incredible amount of mental load and do a ton for you. So go bake for moms. Don't skimp on moms.

Sound advice, Minakshi. Sound advice. Thank you for your time today. Appreciate it.

Thank you so much.