Live From NEMOA: McCann Shares 1-800-Flowers' Bouquet

1-800-Flowers.com's Jim McCann's passion for flowers developed while he was still in high school. He brought a bouquet to a young lady he had a date with one evening. While the flowers weren't the prettiest assortment, the girl still lit up upon seeing them, smiled and gave him a kiss.

"I knew I had to find a way to get these wholesale," he said. McCann, CEO of the company, shared the history of the floral marketer with attendees of the New England Mail Order Association's spring conference in Cambridge, MA on Thursday.

He didn't begin his work life as a florist, however, Originally, McCann was a social worker, a job he kept for many years even after opening a chain of flower shops.

In 1986, he retired from social work and moved into the bloom biz full time, buying an up and coming company he knew of, 800 Flowers. He handled the purchase on his own, saving the expense of lawyers and accountants. Considering he later found out he had purchased a company with $7 million in debt, he termed the process "due negligence."

McCann, of course, turned the company around, thanks to several factors, including the burgeoning interest in 800 numbers as a marketing medium.

The Long Island company also had several lucky breaks. One was the intervention of mogul Ted Turner, who took McCann under his wing.

One day in early 1991, Turner called McCann for a favor. With the advent of the Persian Gulf war, many advertisers were pulling their schedules from CNN. Turner asked McCann to keep advertising, and also asked him if he would mind if the news network ran the 1-800-Flower spots in additional timeslots if they had holes to fill.

The war coverage turned out to be a "great branding event" for the company, said McCann. "It was the war brought to you by 1-800-Flowers."

Another break was a request by AT&T to feature McCann and the flower business in a commercial. The spot initially aired in the spring, and pulled so well for the phone company they ran it through the summer, including three times each night during the Olympics.

1-800-Flowers went online for the first time in late 1991 with CompuServe and then again in 1994 with America Online, becoming AOL's first ever merchant.

The company went public in 1999, and now does $700 million in sales annually, with 70% of its business online.

McCann maintains that part of the company's success is that it is available to customers where ever they want, and however they want to pay – credit card, PayPal and yes, even cash. The company still receives about 20 money orders each day, he noted.

Wine and other food gift items are one of the biggest growth items for the company. To grow this business, the company has acquired several companies, including the Popcorn Factory and $33 million baked goods purveyor Cheryl & Co., the latter acquisition completed earlier this week.

Not all of the company's acquisitions have been successful, he noted. GreatFood.com, acquired in 1999, wasn't a good initial fit, but will be relaunched in the third quarter of this year.

The company has also had success building up holidays that haven't been traditional flower giving occasions. Plants, balloons, candy and trick-or-treat bags have become big sellers, he said. A pumpkin bear plush toy sold 5,000 the morning it was introduced on AOL, he said, noting this was a bit of a problem as only 3,000 had been ordered.

All orders were fulfilled, he said, "although 2,000 did look a bit like a pumpkin cat."