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Business Observer Friday, Mar. 2, 2018 8 months ago

Love 2.0

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Staring at a staggering amount of near-miss sales drives one firm to find a better way.
by: Mark Gordon Managing Editor

Norman Love Confections sells more than 7 million pieces of tasty and premium-made handcrafted chocolate a year.

But what really eats at company founder and president Norman Love?

The amount of sales that sit — unbought — in an online shopping cart at normanloveconfections.com. “We have a high amount of abandonment in our shopping cart,” says Love. “The biggest obstacle (for customers) is it costs too much to ship.”

Shipping rates, up to $30 for a $40 box of chocolates, are high because of the company's out-of-the-way Southwest Florida location and the intricate care put into each package. The latter includes frozen gel packs and other protective material to guard against melting. Norman Love Confections gets a volume discount from FedEx, which Love says is passed on to consumers, not the company.

Solving the lost online sales conundrum is the No. 1 priority for Love and the firm's senior leadership team, which includes his son, Ryan Love, 29, who is director of retail operations. The Fort Myers company has four brick-and-mortar locations in Southwest Florida and 110 employees. The firm declines to disclose revenue figures.

The most direct solution for online sales is a bold step for a company, founded in 2001, that has never expanded outside Southwest Florida. That comes in a new fulfillment center, likely in Pittsburgh or Indianapolis, which will be staffed by Norman Love Confections employees. Norman Love plans to fly to those cities this spring to scout real estate and look for personnel.

While that's going on, Love says he realizes the company, which also sells gelato and cakes and operates a wholesale unit, “isn't a little candy store anymore.” For that, it's grappling with another, even bigger-picture, issue: the kind of company it will be in the next five, 10 or even 20 years, given shifts in consumer buying habits and demographics shifts.

An X-factor is Love, 57, says he hopes to soon slow down a bit. Maybe, he says, he will not work full speed, six days a week. “We've been at a crossroads for a few years,” he says. “We are trying to find the next steps.”

The first big step, even before the fulfillment center, is the company is on the verge of implementing its first-ever SAP — systems, applications and products — software program. At an investment of $160,000, Norman Love says the goal is to have one coherent process that handles finances, packaging and everything else the company touches.

After software, the race will be to build up e-commerce.

Norman Love says the company's online business has grown about 30% a year the past few years, just to get to about 15% of total company sales. That 15% is a more profitable chunk, says Ryan Love, due mostly to lower labor costs. “Online is a nice little business,” Norman Love says. “But I want it to be a massive piece of business for us.”

Ryan Love kick-started fulfillment center chatter at Norman Love Confections last year. Both independently and later with FedEx, he conducted a study that compared lost sales with locations over a six-month period.

The study shows that a fulfillment hub, in the Midwest or western part of the Northeast, will allow the company to drop shipping costs by 70% — from $28 to $30 a box to $9 to $11 a box. “When you bring shipping costs that low,” says Ryan Love, “it opens all kinds of possibilities.”

Norman Love says the investment in a new fulfillment center, from the building to training employees in Fort Myers for a month or two, will cost at least $500,000. But father and son are confident the investment will be worth it, with a projected fourfold increase in online sales, says Norman Love. Then e-commerce will be about 40% of the overall business.

Even with the urgent push to grow e-commerce, brick and mortar will remain meaningful in Norman Love Confections 2.0. That includes expansions and renovations of current locations and new stores, possibly including the Sarasota area. Beyond revenue, both Loves see the stores as a great way to foster the company brand and image — and help it reach the next big goal: Be the leading, high-end national chocolate and confections brand.

“If we don't take advantage of all these opportunities now,” Ryan Love says, “then someone else will.”

Treat time

Norman Love, founder of Fort Myers-based Norman Love Confections, is often asked what he loves the most among the wide assortment his company produces.

The answer? “My favorite individual piece is definitely our Tahitian salted caramel,” writes Love, answering questions on an Ask Me Anything post on Reddit in February 2017. “As far as cakes/entremets go, any combination of chocolate and hazelnut. Can't go wrong.”

Love also told Reddit users about his favorite commercial store-bought sweet. “Not exactly a 'store,'” he writes, “but I'll take a Dairy Queen cheesecake blizzard over just about anything.”

Back in time

Norman Love is a purposeful entrepreneur, but his company's singular success is something of an accident.

Love founded Norman Love Confections in 2001, soon after he left a grueling job as corporate executive pastry chef for Ritz-Carlton. In that gig, he spent up to 42 weeks a year on the road, helping open hotels worldwide.

He launched the new business at home, and later moved into in a 700-square-foot room in a medical office building east of Interstate 75 in Fort Myers. Friends who owned the building charged him $200 a month in rent, including utilities. The business was supposed to be something that allowed Love to slow down, spend more time with his wife, Mary, and their two young children.

But Love's creations, each one a work of art with distinctive colors and eye-catching shapes, were a big hit in Southwest Florida. The business grew into a retail operation, opening its first chocolate salon on Daniels Parkway and Lindbergh Boulevard.

Love, in an Ask Me Anything post on Reddit in February 2017, talked about those early days, answering a question on the toughest part about opening a shop. “When it was a small scale operation I could run it pretty much from the comfort of my home (and later a tiny medical building turned kitchen.)” writes Love. “When things took off and I'd outgrown that, getting all the infrastructure in place was really daunting.”

Now, with a multimillion-dollar business and budding e-commerce opportunity, Love faces different kinds of business growth challenges. Namely, having the discipline to turn down opportunities that could dilute the brand or customer service. “Just because it smells good,” he says, “doesn't mean I eat it.”

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