A business that transformed restaurant home delivery into a high-tech, interactive experience is expanding to flowers.
Minneapolis-based Bite Squad revolutionized home food delivery to include a wide variety of restaurants and food, eco-friendly packaging, and GPS tracking for pinpoint delivery times. Now, Bite Squad co-owners Kian Salehi and Arash Allaei are adding home delivery of flowers, chocolate and stuffed animals with Giftsquad.com.
"We have the software that coordinates pickup and delivery times, a team of drivers, and peaks and valleys between lunch and dinner business," Salehi said. "It's really about logistics."
Salehi said the lulls drivers had before lunch and between lunch and dinner made adding additional products an easy decision, so they added more than 120 gift options that can be delivered up to 20 miles from their downtown Minneapolis office.
Choices include roses, orchids, sunflowers, potted plants, balloons, chocolate from B.T. McElrath, cupcakes from Franklin Street Bakery, and gift baskets for a new baby and stuffed animals such as Freckles the Elephant and Ring Toss Unicorn.
Senders can track the delivery vehicle's progress online or receive real time electronic notification via text or e-mail when the gift is delivered. They can also request a photo of the recipient receiving the gift, so they can see the reaction.
Unlike a lot of traditional services, Gift Squad keeps on delivering until 11 p.m. Orders can be placed as late as 8 p.m. and still be delivered locally the same day, although flower choices may be limited late in the day.
Initially, the owners considered collaborating with florists and taking over their deliveries as they have with restaurants, but most florists close their doors at 6 p.m.
Since Bite Squad/Gift Squad drivers deliver almost until midnight, they decided to hire their own florist, photograph their own arrangements, and deliver their own product. "If we do it ourselves, we can control quality and pricing," Salehi said.
Allaei estimates that consumers can save up to 30 percent over a delivery from competitors such as 1-800-Flowers or FTD. "Our delivery fees are only $4 to $10 for most orders and the flowers arrive assembled and in a vase," he said.
Gift Squad can save by eliminating the middleman fees and passing the savings on to the consumer. FTD typically charges the florist about 7 percent of the order, about $10 or $15, said Jim Chartier, analyst for Monness, Crespi, Hardt, an equity research firm in New York.
Anthony Shane, who used to have a floral shop in Minneapolis and now operates occasional sales at Flamingosdivinefinds.com thinks Gift Squad's floral prices look fair. "The prices are good, especially when you don't have to trim and arrange the flowers yourself like at some 1-800 services," he said.
But florists say the business is not easy. "It's tough to compete with the impact of supermarkets and big box stores like Home Depot, Target and Wal-Mart that sell flowers," said Roger Beck, who owns Roger Beck Florist in Minneapolis. "A florist has to buy flowers to fill orders as they come in, which is expensive, or they have to buy in large quantities that they may not have orders for. It's a Catch-22."
Salehi said the floral and gifts part of the business is still in its infancy, but more than 10 orders are coming in daily. They buy flowers from local wholesaler Koehler & Dramm, which is near their Minneapolis offices. When they have fresh flowers and no orders, Gift Squad will allocate them to their marketing budget, including catering customers.
The parent company Kasa Capital, which includes catering, Crowd Cut daily deals and 30 other e-commerce sites, has purchased coolers for the flowers, but the business doesn't have to stock for walk-ins. "We own our building, but we don't have a store. It's delivery only," Salehi said.
To get the word out, the owners are leveraging existing Bite Squad and Crowd Cut customers, which number more than 500,000 for CrowdCut alone. There's the usual discount for first-time customers ($10 off using the coupon code FLOWERS) but also e-mail blasts, direct mail, Gift Squad ad wraps on their Prius delivery vehicles, social media blitzes and search engine optimization techniques.
The Twin Cities are a test market for Gift Squad, but it's possible that the concept will be expanded to Seattle, where Bite Squad is already in 170 restaurants after debuting in March. Bite Squad is growing even faster in its newest market, Las Vegas, where the company signed up 150 restaurants in 30 days.
Next on deck for the company locally is a partnership with Surdyk's, starting in about two weeks. Bite Squad/Gift Squad will deliver liquor for a flat fee of $10 to $15 to most of the Twin Cities.
"We want Gift Squad to become the one-stop shop for any kind of celebration," said Salehi. "Direct pricing, precision ordering and ridiculously fast delivery."
John Ewoldt • 612-673-7633
