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Cover Story : In Full Bloom

Innovation sows 33 years of growth for 1-800-Flowers.com

July 2009 By Joe Keenan
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Having come a long way from its modest beginning as a chain of floral shops in metropolitan New York, 1-800-Flowers.com usually has set trends, not followed them.

Whether it was the foresight to be, reportedly, the first company to incorporate a toll-free phone number into its name in 1986 (the company was originally called Flora Plenty) or to anticipate the impact the Internet would have on modern-day businesses by being the first merchant of any kind to process an online transaction on AOL in early 1991, this integrated marketing powerhouse has kept innovation at the heart of its growth.

Such trailblazing vision has helped the Carle Place, N.Y.-based company grow its portfolio to nearly $1 billion in annual sales. It’s also accumulated 10 subsidiary brands, including such noteworthy marketers as The Popcorn Factory, Plow & Hearth and Fannie May. Amid all this expansion over the years, 1-800-Flowers.com has maintained a keen ability to integrate a consistent marketing strategy across catalog, Web, retail, e-mail and mobile channels.

This isn’t to say that 1-800-Flowers.com hasn’t been tested. “We’re not immune to being clipped by this economic firestorm that’s raged up around us,” says Founder and CEO Jim McCann. The company, which also faces increasing competition in the floral and gifts space, had the first round of layoffs in its 33-year history this past January. In addition, the 2008 fiscal year marks the first down year in company history, with revenues expected to drop by more than 5 percent from the year prior.

But with so many integrated marketing firsts in its timeline 1-800-Flowers.com truly believes its core values will make it even stronger as it emerges from these trying times.

4 Steps to Recovery
While not welcome news, last year’s hardships have strengthened McCann’s and 1-800-Flowers.com’s belief that innovation and investment in the future, notably in technology and talent, will pave the way for its “next 33 years in business.”

The company has targeted four areas to get that process started:

1. Take better care of customers. Although McCann already believes 1-800-Flowers.com is the best at customer care, he knows it can do a better job.

2. Take care of its finances. This includes working with cash, maintaining a strong balance sheet and being flexible so 1-800-Flowers.com is in position to act if the right acquisition opportunity presents itself. To that end, the company enters the 2009 fiscal year with 20 percent less operating expense than 2008.

About 1-800-Flowers.com
Founded: 1976
Headquarters: Carle Place, N.Y.
Primary merchandise: Floral and gift arrangements
Annual Sales: $919 million
Sales by channel: 60 percent online, 20 percent retail, 20 percent wholesale
Average order size: $65
# of employees: 2,500 (est.)
Catalog circulation: 90 million-plus (including all titles combined)
Retail stores: two company-owned locations, 106 franchise locations
List manager: Millard Group
Catalog printer: Quad/Graphics
E-mail service provider: Experian CheetahMail
Affiliate marketing provider: LinkShare
 

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