Episode 26: Creating a Great Customer Experience with Ajay Kori of UrbanStems

Jun 14

In this episode of the Subscriptions: Scaled podcast, Nick Fredrick, President of Rebar Technology Solutions, is joined by Ajay Kori, Co-Founder & Chairman of UrbanStems, a flower and plant delivery service available in select cities across the U.S.

What is UrbanStems?

Founded in 2014, UrbanStems is the online flower delivery company that creates a unique flower and plant gifting or subscription experience. The company was built to offer same-day, on-demand delivery in major U.S. cities, and now offers subscription services for customers who want recurring delivery.

The founding of UrbanStems is a classic entrepreneurial story. Ajay was sending a lot of flowers due to being in a long-distance relationship, and his experiences were often frustrating and disappointing. He looked into the industry and found that flower delivery was rated dead last in customer satisfaction out of all ecommerce categories.

Coming in from outside the flower delivery industry allowed Ajay to create a system from the ground up without being influenced by legacy thinking about how things should be done. He focused from the beginning to make sure UrbanStems gave the best possible customer experience possible, which meant fast same-day delivery, great quality, reasonable prices, and no surprise fees at checkout.

Building UrbanStems

The main problem that he identified with traditional flower delivery is that it uses a wire service to send orders to independent flower shops in close proximity to where the order is going to be delivered. The wire services don’t own the flowers, they just pass the order on after taking a cut of the profit. The local florists are then faced with fulfilling low-profit orders because much of the money has already been taken off the top before they get the order. This makes those orders a low priority, and they are often fulfilled with expiring stock that isn't exactly what the customer ordered.

The founding team at UrbanStems knew that the only way to accomplish their goal of creating the best possible customer experience was to own the entire flower ordering and delivery process from start to finish. This meant controlling their entire supply chain, controlling their own warehouses, building relationships with growers and farms, and developing their own delivery systems. They also knew that, as outsiders, they would have to build all these systems and processes from scratch.

This full stack integration of the entire process allows UrbanStems to control what is being pulled from the farms, and they can have that inventory in one of their distribution centers in as little as a few hours. Having their own delivery fleet, which in cities like New York and Washington D.C. includes bicycle couriers, means customers can get same-day deliveries featuring the freshest, longest-lasting products. Unlike food delivery systems where the hungry customer is constantly checking the status of their delivery, 95% of UrbanStems’ customers don’t know anything is coming. UrbanStems delivery people don’t just drop the flowers off at a location, they greet the recipient with the appropriate line, like “Happy birthday,” and take a picture of the delivery to text to the customer. This results in a phenomenal experience for both the customer and the recipient, and, because they have cut out the middleman, it is more affordable than the wire services.

Betting on Themselves

Ajay and his team made a bet on themselves from the beginning that focusing on single bouquet delivery would lead to success. He points out that florists are essentially artists, and most of them are very good at creating beautiful settings for events and weddings. These mom and pop businesses often treat single deliveries from the wire services as an afterthought. By making it the only focus of their business, Ajay and his team were able to make the process much more efficient and cost effective.

When the pandemic hit, that efficiency paid off in a big way. While brick and mortar stores were closing, at least temporarily, flower delivery orders actually increased. The isolation many people felt led them to send flowers to let people know they were thinking about them—and that increase in demand shifted to UrbanStems. The single bouquet bet the company made at the beginning resulted in considerable growth during the pandemic.

Subscription Services

Because of the focus on single bouquet delivery, Ajay admits that they overlooked the value of subscription services in the early days of the company. Offering subscriptions has resulted in recurring revenue, but Ajay points out that those services are also beneficial to the customers.

Many of their customers enjoy sending flowers, whether they be gifts or simply to brighten up the home or office, and they appreciate not having to return to the order page every time. Having subscribers allows the company to increase focus on those customers through marketing efforts and upgrades to bouquets, which increases customer satisfaction.

Evolution is Key

When the company started, plug-and-play on-demand platforms didn’t exist, forcing Ajay and his team into building their platform from scratch. This allowed them to experiment with features and processes in a way they couldn’t have done had they been on one of today’s big platforms. However, there have certainly been bumps in the road that have forced them to evolve and be open to changing their ways of thinking.

One example happened several years ago on Valentine’s Day. Their order volume spiked so much that their system was not able to handle it. The resulting cascading set of failures caused them to miss on delivering half of their orders, a number that was in the tens of thousands. This happened at a critical time at UrbanStems, and Ajay admits it nearly sunk the company. But they recovered and set out to permanently fix the systems and processes that let them down.

When asked how he could have avoided having a system in place that failed, he says, “The key is to not let it get to that point. But it's hard because when you're a startup everything is ‘on fire.’ So unless something is actually on fire, you're not going to address it. So you have to be proactive. This is the advantage that multi-time founders have. You see those things before they break and you fix them.”

To hear more from Ajay about single bouquet and subscription flower delivery, and creating a great customer experience, tune into this episode of the Subscriptions: Scaled podcast.

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