(The following article is property of Avenue Code, LLC, and was originally published with permission at TotalRetail on August 21, 2018.)
Aaron Zagha is the head of e-commerce, international at Teleflora, an online floral retailer. In this interview, Zagha shares his unique perspective on the challenges and opportunities of globally expanding an e-commerce company that has been in business since 1934.
Avenue Code: With operations in Europe, Asia, and the Americas, Teleflora is a major player in the global floral space. How do you determine which global markets are ready for expansion?
Aaron Zagha: Historically, our expansion decisions were driven more by acquisition opportunities than de novo market entry. Teleflora is international and has partners all over the world, so we’re often approached when business owners in our industry want to sell. If the market presents a good cultural fit and the price is right, we expand. However, we also did an organic entry into the U.K., and right now we’re entering another new country as well. We entered the U.K. because it already had a strong connection with Australia, with families sending flowers back and forth between the two countries.
AC: What are the biggest challenges and opportunities you encounter while establishing a presence in a new global marketplace?
AZ: One of our biggest challenges is also our biggest opportunity: our competition. Often there’s a single market leader, and while it’s tough to compete against an established giant, sometimes customers are dissatisfied, which creates a massive opportunity. Our other challenge with global expansion is adapting to a new culture: you can miss out on 20 percent to 30 percent of the market if you don’t learn their holidays, language nuances, marketing opportunities, preferred payment types, etc.
AC: How do you build a core team to collaborate with you locally? Beyond the research, how do you find that team?
AZ: Sometimes we have to build a team from scratch, but more often we’re able to utilize personal connections. If an employee has a friend or family member in a country where we’re expanding, we solicit local feedback on top products, traditions, and even what each flower symbolizes in that culture.
AC: In 2013, Teleflora acquired Floristworks, an e-commerce business in Australia. What challenges did you encounter when merging technologies for the two companies?
AZ: I’d have to say our biggest challenge is merging companies onto the same tech platform. When we acquired Floristworks, we were able to merge our back-end systems relatively quickly, but we left the front-end system untouched. When the strategy changed post-acquisition, we decided to update Floristworks’ systems and migrate the front end to ours, which was quite a process.
AC: How do you see the perception of IT in different countries, and how the U.S. in particular is either catching up or ahead of the game when it comes to platforms?
AZ: Unlike U.S. e-commerce platforms, almost all international platforms are homegrown. This is partly because the cost of bigger platforms is prohibitive unless you’re a well-established player in a large market. When you acquire internationally, you have to decide if you’ll keep the homegrown platform, which is often very customized, or adopt a higher-performance platform like Oracle or Magento and lose the customization. We plan to migrate Petals onto Oracle in the coming year.
AC: What does Teleflora look for in its strategic partnerships?
AZ: In all our partnerships, what’s most important to us is brand integrity. We are a luxury, upscale provider, and all of our flowers are hand delivered rather than shipped in a box. We always look for local florists who can meet our quality standards. On the e-commerce vendor side, we also have to make sure service providers are well-funded so that they can see our projects through on a cost-effective basis. To be successful at marketing, you have to be profit driven.
AC: Teleflora has been in business since 1934, which must have necessitated several strategic iterations to keep pace with the ever-evolving retail landscape. Tell us about this evolution from a technological standpoint.
AZ: At its heart, Teleflora has always been a tech company. It was among the first big floral companies to adapt to e-commerce, and we always stay on the cutting edge of tech trends. One of our advantages is that we’re privately owned, so all decisions are made very quickly, even when it comes to larger sums of money.
AC: How do you handle e-commerce as a company with a perishable product?
AZ: Florists occasionally under-order so that they can keep their products fresh, but this typically means that some run out of inventory and have to stop selling the day before a holiday. We’re equipped with a huge amount of data and we try to help them forecast demand to avoid this issue, but it's challenging.
AC: How do you stay abreast of technological advances in retail, and how do you decide which to adopt?
AZ: I constantly read news, keep pace with the competition, chat with friends who run e-commerce companies, and attend e-commerce conferences.
AC: In addition to serving as Teleflora’s international head of e-commerce, you’re also a founder and current member of Westside Analytics’ investment committee. How has your experience with WA’s technologically forward data analysis methodologies informed your marketing and investment strategies for Teleflora?
AZ: The two roles are very symbiotic. WA collects and analyzes online data, and often picks up on trends long before the media does. Teleflora benefits from insights I’m exposed to through my work with WA, and I’m able to help guide WA on what data to collect on e-commerce companies based on my experience at Teleflora.
AC: What's your biggest achievement at Teleflora?
AZ: The biggest achievement for me has been building a wonderful team in four cities across two countries. Since I joined Teleflora, our flower sales have been increasing three times to four times faster than the overall e-commerce growth rate. We also manage over a thousand local florist sites. Allowing these small, locally owned businesses to grow faster than the market is a lot harder when they’re up against huge competitors with money to invest in advertising, so giving these companies an opportunity to grow is extremely rewarding.
AC: Wonderful, thank you Aaron! It’s been great hearing your thoughts. We’ll stay tuned for the official announcement of your Latin America debut.
Holly Vander Wall
Holly Vander Wall is the Director of Marketing and Client Services at Avenue Code. She is an eCommerce enthusiast, a marketing guru, and an animal lover.