Bloom & Wild are taking a daring step

You cannot grow customer loyalty without growing market share. That is the view of marketers such as the Ehrenberg-Bass Institute, who believe that loyalty is largely a predictable function of market share, increasing as brands grow their customer base.

Online florist Bloom & Wild disagree. 

In their most recent filing with Companies House, the company has indicated that they are turning their attention ‘from growth to profitability’. As such they are cutting their marketing spend and have shifted their strategy away from the acquisition of new customers toward retaining existing customers.

In practice this means the company is prioritising the lifetime value of existing customers by expanding its offering to cover other non-flower gifts. Doing this gives the company the chance to increase the size of market opportunity available to it whilst also giving existing customers more reasons to purchase on a platform they know and trust. 

There have been consequences for Bloom & Wild however. Revenues declined by 19% to £118m compared to £145.5m last year, with the company attributing this partially to  softening demand across direct-to-consumer retailers post-pandemic. Bloom & Wild have pointed out however, that this revenue is still two and a half times bigger than the revenue it received the year before the pandemic. 

Of course, despite this positive outlook, the company has suffered other losses. Operating loss widened from £20m in 2022 to £100.2m in the most recent filings. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) losses widened to £4.7m from £4.2m the previous year. The vast majority of these losses were generated in the first half of the year according to the business. 

Bloom & Wild has indicated that in the second half of the year, with their strategy bedded in and consumers more aware of their offerings, profitability has increased.  Though they have not yet provided full figures for this.

Bloom & Wild are not going to suddenly abandon their long thought out strategy, and so, they will serve as a case study as to whether one can achieve customer loyalty and retention without growing your market share. A fascinating time is ahead.