The Bitter Scent of a Floral Fiasco
Cards and flowers, a match made in heaven, right? Hallmark executives certainly thought so when they lighted upon the idea of selling flowers in their card shops. What could be better? Hallmark already had a distribution channel with stores throughout the U.S. Customers loved Hallmark cards, and who doesn’t like flowers?
What could wrong? A lot, as it turns. out. Hallmark lost millions on the flower initiative and eventually mothballed the entire operation. A dicey decision, indeed.
What makes this story intriguing is that Hallmark executives did, in fact, look before they leaped. They conducted focus groups in an effort to learn what customers thought about the flowers idea. To the executives’ delight, focus group respondents stated that they would buy flowers in Hallmark card shops.
The problem? No one asked the respondents when or how they purchased flowers. Only after stocking stores with flowers did Hallmark executives learn the terrible truth. The card stores were usually among the first stops as consumers made the rounds at the mall (most Hallmark stores were located in malls.) Cards were small, non-perishable, and easy to carry.
Flowers, in contrast, were big, bulky, and perishable. Consumers often bought flowers near the end of their mall shopping often from a grocery store where, of course, they bought other perishables before heading to their cars.
Further complicating Hallmark’s floral initiative was the fact that customers would typically run to the corner florist rather than the mall if they only needed to buy flowers. Given that most Hallmark stores were located in malls, Hallmark never stood a chance in this scenario.
In retrospect, it seems clear that Hallmark executives fell prey to at least two decision traps.
Bias, as in cognitive bias: One such bias is the confirmation bias (discussed in detail in confirmation bias), our tendency to pursue information that reinforces what we already believe to be true. Hallmark executives desperately wanted to boost revenues by selling flowers. Even before conducting “research,” they had essentially decided to move forward. Rather than probe for what could go wrong, they set themselves up for finding the answers they desired. The result? Millions in lost revenue.
Communication problems: As discussed in Messy Minds and Mangled Communication, the illusion of transparency is the the mistaken belief that others can easily grasp our ideas, thoughts, and emotions and that we, as listeners are accurately hearing what the speaker intends to say. This illusion clearly occurred during the Hallmark focus groups. Focus group participants genuinely believed that they were providing the information Hallmark needed, and the executives thought that they understood their customers’ intents and shopping behavior. Both parties were wrong and contributed to the floral fiasco.