UrbanStems CEO Seth Goldman on making national flower delivery feasible

On this week’s Modern Retail Podcast, Seth Goldman, the CEO of online flower and plant delivery service UrbanStems, discussed the ins and outs of the e-florist business.

Over the last two years, UrbanStems saw year-over-year growth in both 2020 and 2021 — even after the company shut down its local delivery services in March of 2020, which resulted in a 60% decline in its business at that time. But when things reopened in July, the company was back on track and “revenue growth continued to scale,” said Goldman. Indeed, sales grew 130% in 2021.

Now, with these two years in the rearview mirror, Goldman says he’s figuring out what parts of the business to invest in. “For all brands, it’s about starting to make sure that all of those customers that tried us out are sticking,” he said.

Venture funding is helping with that. Last year, Urban Stems raised $20 million, giving it a valuation north of $100 million. This year, Goldman is trying to continue figuring out how to best use that money.

One of his focuses is on building out the infrastructure that allows the company to deliver its flowers. Meanwhile, Goldman is also investing in both the technology and user experience side of things. Lastly, the company is also investing in its team and growing its headcount.

Goldman spoke about all of those aspects of the business — infrastructure, technology and talent — and how he’s thinking about prioritization. “There’s a lot of work to continue to do across all three,” he said.

Here are a few highlights from the conversation, which have been lightly edited for clarity.

How UrbanStems works
“A lot of our flowers come from South America, mainly Ecuador and Colombia. Those are the two largest growing regions for flowers. They come in into Miami, which is the biggest port of entry into the U.S. We then distribute them from Miami to our biggest facility in Maryland and then around the country to other facilities. And, from there, we redistribute that product to New York and DC — so you can tell how easy this is so far. And, from there, an order that you place on the website, for example, right now today in New York, would go from our dark store — which you’ve heard about in other industries, you can’t walk in there. Our amazing team is standing there at the ready to receive your order, place your bouquet in our very stylish box and zip it out via courier messenger to your loved one or friend or other recipient that you wanted to make their day today.”

Goldman’s three focus areas
“Our latest round of funding, the investments are really going into team, infrastructure and technology — some into marketing as well. But when we say team, we saw a lot of roles that are going help us deliver a better customer experience, both digitally and physically. Infrastructure, we’re able to invest more in our Maryland facility and look at other facilities that can help us grow, become more profitable, add more options for our customers when they’re shopping with us. And then, on the technology side, we — like many companies that look like us from a distribution standpoint or an e-commerce standpoint — really saw the opportunity to build tech and tools to make the customer experience better, less friction filled — and the same thing for our employees. So there’s a lot of work to continue to do across all three areas.”

Floral technology still has a ways to go
“I’ve seen robot bouquet making, I think it’s not quite there yet. There is automation that you can put in warehouses. We look into that. If not, just data so we can track how people are doing and where people might be struggling within a warehouse environment. But we also want to ensure we’re really maintaining our cold chain throughout. Just like a vegetable that you leave on your countertop versus keeping your fridge — you know that it’s going to last longer if you keep it in your fridge — flowers are no exception. They want to be kept perfectly in 34 to 36 degrees. The more we can do to track that and maintain that, the longer they’ll last — both with us, but, more importantly, with the end consumer. There’s also some really cool newfangled technology that’s coming out that we’re always looking at. We found things like micro-perforation machines that poke laser holes to allow the bouquet to sit in its own little atmosphere environment that [allow it] to last longer. These are still in their infancy.”

Flowers have lost their scent
“Something I’m going to tell you that’s going to crush you a little bit. Most flowers have actually had the smell bred out of them. Because the smell is the releasing of gas and gas kills flowers. There are some varieties we use that still have that beautiful sweet floral smell, and I would love to use more of those. But we want the flowers to live and live longer. So that was something that crushed me a little bit when I learned it.”