1-800-Flowers’ Second Blooming

Jim McCann talks about sowing the seeds for future growth at a mature company.

July 7 2014 by Jennifer Pellet

The company’s first telemarketing station averaged less than 40 calls a day—calls, not orders. But while the concept wasn’t an instant hit, McCann’s company soon reaped the rewards of the publicity generated, in part, by its very critics. “It was so novel that we got a lot of free ink, both people saying it was crazy and people saying it was revolutionary,” says McCann. “It wasn’t an instant hit but the press we got helped us become a brand.” Given its maverick culture, it was only fitting that 1-800-Flowers also become one of the early adopters of Internet sales, staking its claim on the virtual marketplace early on by working with AOL and CompuServe.

In hindsight, the brilliance of the moniker may seem obvious, but at the time the market was dubious.

“It was probably 1996 when we realized that our business couldn’t continue to grow in a telephonic environment—we needed to put all our bets on the Internet,” says McCann. Similarly, when the social and mobile sales channel began to gain traction, the company took a proactive approach, becoming one of the first companies to enable transactions on Facebook.

Just as a rising tide lifts all boats, a drought can ground them. 1-800-Flowers did not emerge unscathed from the tumble the gift industry took during the economic downturn. Unable to stem losses with cost-cutting measures, the company had to resort to laying off some of its workforce. “In 2008, we clearly couldn’t continue to fund the dozen and a half projects we had underway,” says McCann, acknowledging that allocating resources becomes tougher during a difficult economy. “So we made a bet on social and mobile commerce, because we felt it was clear that it was going to take over the world.”

Still, investors grumbled about the cost of continuing to invest in the rosy future of mobile sales. “It was painful to be pouring money into something that wasn’t going to produce anything for some time,” recalls McCann. “It’s tough to sit around with a board of directors saying, ‘You just had a layoff for the first time in your company’s history and you’re still pouring money into social and mobile?’”

McCann persevered and today 1-800-Flowers is back on a growth track, one strengthened by its efforts to reach for customers through social media and the mobile market. “Bricks and mortar was the first wave, the 800-number was the second and the Internet was the third,” says McCann. “But I think that the fourth wave will be the biggest. There are 5 billion mobile phone contracts in existence in the world and only 6 billion people. There are 450 million people who use Facebook monthly. The wave is just unquestionable.