Hideaki Inoue, president
of the company that runs the Aoyama Flower Market chain,
earlier in life had no particular interest in flowers.
But today, the former accountant cannot live without them.
"Flowers enrich people's spiritual lives," said
Inoue, 44, who surrounds himself at home and in the office
with flowers and greenery.
The entrepreneur, whose corporate
slogan is "living with flowers every day," wants as many
people as possible to enjoy the beauty of flowers.
Most
of Park Corp.'s 60 Aoyama Flower Market shops, boasting
baskets full of floral color, are located near train stations
and department stores.
Ready-made bouquets are kept affordable
so people can buy them on a daily basis. The smallest clusters
are priced at ¥368, and the most expensive medium-size
bouquets sell for ¥1,575.
When Inoue opened his first
shop in Tokyo's upscale Aoyama district in Minato Ward
in 1993, most bouquets on the market were large and costly — ¥5,000
to more than ¥10,000.
Inoue thought small, setting up
his first shop in 36 sq. meters of floor space near a building's
staircase where there were already plants arrayed. He negotiated
with the owner to get a huge discount in rent.
"I said if I opened a shop in that space,
the owner would no longer have to pay for the plants, while
earning rent and having lots of flowers instead," Inoue
said.
He was able to rent the space at about half
the going rate. By keeping his rent low, Inoue could offer
his flowers at lower prices. In the process, he defied
the common notion that flowers are expensive and only for
special occasions.
His marketing and pricing strategies
proved effective.
Park's annual sales grew by more than
six-fold to ¥3.84 billion in 2006 from ¥610 million
in 2000, and the chain now has 400 employees, including
part-timers. The outlet adjacent to JR Shibuya Station
near the Tokyu Department Store draws 600 to 700 customers
a day.
It's not just the low prices that make the
chain popular.
Inoue uses flowers, plants and nuts that
have been deemed unsuitable for bouquets by other florists
to make stylish, novel arrangements. He says that knowing
nothing about flowers allowed him to try new things.
Small
vases, priced between ¥500 and ¥1,000,
are also selling well as customers buy small bouquets on
a daily basis.
"I find a similarity between wine and flowers," Inoue
said, pointing to the emergence of good but inexpensive
wine, which helped expand consumption in Japan. "Both used
to be expensive and were considered something for special
occasions in the past. But now, both are becoming something
to enjoy on a daily basis."
Inoue did not initially aspire
to become a florist and his encounter with the flower business
happened by accident.
After graduating from Waseda University
in Tokyo in 1987, Inoue joined a U.S.-based accounting
firm and went to New York. But a little more than a year
later, he quit, realizing something was wrong about his
job.
"Auditing a company's accounts is checking
what has already happened," Inoue said. "As someone who
always wants to project things ahead, I realized checking
past accounting procedures wasn't the job for me."
Soon
after returning to Tokyo, Inoue established Park in 1988
as an event organizer. He arranged various kinds of parties,
including weddings. Then he began looking for a side business
to generate cash flow to get the event business running.
A
friend in the flower business introduced him to a wholesale
flower market, where he saw that prices were far lower
than what retailers charge.
"A rose was trading at ¥150 on the market
at the time, when it retailed for ¥800 at shops," he
said.
It occurred to him that if he were to sell
it at twice the wholesale price, it would still be less
than half the store value.
But there was a reason flowers
carried a hefty price tag.
Shops had to cover the losses
from unsold flowers as well as rent.
"I thought if those factors were removed,
I would be able to sell flowers at lower prices," he said.
In
1989, Inoue began selling flowers to individuals using
his network of personal connections. He approached friends,
including one with a lawmaker father, and took orders by
phone. He delivered flowers fresh from the wholesale market
to the Diet members' office and to companies.
In this way,
he only sold what was ordered and did not have to set up
a store.
Through word of mouth, his deliveries of
low-priced fresh flowers gradually found more customers.
But
not having a store had one disadvantage. He could not respond
to urgent orders because there was no inventory. The time
had come to set up a shop.
"At first, I wasn't 100 percent committed
to the flower business. I was always looking for a new
business opportunity, believing there should be other lucrative
businesses," he said.
But a stay in a hotel that lacked
flowers drove home the notion that he always wanted to
be around them.
He would bring bunches home every day to
develop an eye for his wares, and he realized that living
with flowers had become part of his life.
"That is when
I thought I'd focus solely on the business of spreading
flowers in this country."
Instead of having one customer
buy a bouquet of 100 flowers, Inoue would rather sell one
flower each to 100 people. To reach out as much as possible,
the company continues to aggressively open new stores.
While
everything appears to have worked well for Inoue, his fast
expansion has brought a new dilemma — securing
qualified staff.
"A major hurdle is hiring talented people," he
said. "We have to provide products and services that exceed
customers' expectations," and educating staff is also important.
He
said the company plans to open a new training facility
in Minato Ward near the head office next month.
"I think there is still room for us to open
250 stores in Japan, especially in cities," he said. "Then
we want to go overseas someday."
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