Flower power makes company blossom

One man who can't be accused of not understanding women is Jim McCann, the Irish-American entrepreneur who bought 1-800-FLOWERS…

One man who can't be accused of not understanding women is Jim McCann, the Irish-American entrepreneur who bought 1-800-FLOWERS Inc and turned it into a $300 million (£211.5 million) company.

Mr McCann was born in New York, the son of a painting contractor. After leaving school, he worked for his father in the painting business and then turned his hand to bar-tending before running a home for boys in Rockaway, Queens.

"I had finished school and was looking for something meaningful, so I gave social work a try," Mr McCann said recently in a speech at the Internet & Electronic Commerce Conference in New York.

For 14 years, he ran St John's Home for boys aged 16 to 21. "I learnt how to deal with groups and the occasional gang fights," he said, adding that this was good preparation for later on when he would be "dealing with the Post Office". He also learnt how to make a "special connection with people. They taught me the benefits of team-work, setting goals and having integrity in those relationships," he said.

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Mr McCann (46) said his first recollection of his experience with flowers was when he had his first official date with Margaret from Woodside in Queens. On his way to her house, he stopped at a flower seller who made him a beautiful bouquet.

"The paper they were wrapped in was wet and I didn't know if it was wet from the stems of the flowers or the palms of my hands," Mr McCann recalled. When he handed the bouquet to Margaret, she was so thrilled, he said he was ready to run back for one more bunch. "This was a business I had to become involved in," he said.

While retaining his full-time job, he bought a flower shop in Manhattan and helped out at weekends in order to provide additional financial support for his family. "I liked it because it hadn't been McDonaldised yet," he said.

Flowers, he added, are associated with ceremonies and celebrations and have been a part of every culture for hundreds of years. Therefore, they were a business that wasn't likely to go away. Over the next 10 years, he bought 14 flower shops in New York City, but still kept his full-time job at the boys' home. To help, his four brothers and sisters all worked for him in the shops. In 1983, he finally made the floral industry his full-time pursuit.

In 1985, a company called 1-800-FLOWERS was formed in Texas with the idea of selling and delivering flowers directly to consumers via telephone. The concept of using toll-free numbers for marketing was then in its infancy.

Although 1-800-FLOWERS did not then have McCann involvement, their shops acted as the fulfilment florist for the New York area. Soon thereafter, that company went bankrupt and Mr McCann bought what was left of it, including the name. "I felt 1-800 was the best marketing idea," he said.

"1-800-FLOWERS was our name and our telephone number and you could dial it 24 hours a day. But we needed to spend a lot more on marketing."

He took his younger brother, Chris, on board to help run the business. "We had bought a financial mess," he said. "When a company fails, I didn't realise you had to do due diligence. What we did was due negligence!," he said. But added that even without money, they had to think big. "We applied the same logic and marketing as when we ran a single flower shop," he said. While this strategy yielded some results, they also had some lucky breaks.

In 1991, during the Gulf War, when many advertisers pulled their time-sensitive ads from Ted Turner's Cable News Network, 1-800FLOWERS filled the gaps. "I bought one slot and was delivered 24 slots for the same price," said Mr McCann. And then in 1992, AT&T featured 1-800-FLOWERS in its advertisements for the Olympic Games in Barcelona.

The 1-800-FLOWERS brand name "has now been crafted," said Mr McCann and "we're taking the brand and applying it on different channels". This, along with the telephone number, includes the Internet, retail stores and a relaunch of the catalogue efforts.

"We're taking these channels and expanding internationally," he said. "We're running a small company that's hot. We're being bombarded with deals a second and we don't have the staff or the resources to deal with them," he added.

But of all the moves the company has made, Mr McCann said the decision of which he is proudest is of becoming involved in the online world six years ago.

The company was, in fact, one of the pioneers on the Internet. "We needed to be involved in this arena," he said.

Two years ago, 1-800FLOWERS was the highest volume Website in terms of transactions. "Although we won't be there again, we were an early branded participant on the Web," said Mr McCann. Now 10 per cent of the company's business, that is $30 million in sales, comes through the Website (1-800FLOWERS.com). In fact, 8 per cent of customers who place a telephone order mention the Website. "Clearly they're using it as an electronic catalogue," said Mr McCann. There is an increasing amount of cross channel business.

Twenty-six people are involved in the management of the interactive services for 1-800FLOWERS of which 25 are women. Mr McCann said that while many of the company's original interactive partners have either closed up shop or been taken over, "we're still holding our own in terms of transactions".

Now 1-800-FLOWERS, which is based in Westbury, New York, has 150 stores, eight switch centres and 2,500 hand-picked florists to fulfil orders. It has also introduced an Internet-based communications platform for its florists in order to enhance its relationship with them during off-shop hours and to provide them with weekend training forums. The company also buys flowers from around the world and puts them in refrigerators so seasonal flowers can be available eight to 10 months of the year.

"For us, though, customers are the ultimately interactive experience," said Mr McCann. By this, he referred to the importance of the face-to-face interaction in a store.

"All we want to do with the Internet and our catalogue business is to give another channel for our customers to access us and for us to be able to recreate our stores," he said.

Until last July, 1-800-FLOWERS had invested $6 million in the Internet. It then entered a marketing agreement with America Online and has now invested $25 million to advertise itself online.

But ultimately Mr McCann said, "we're a retail florist. We're not technologists or telemarketing gurus but we relate to our customers".

According to Mr Chris McCann, 1-800-FLOWERS may set up telephone operations or a bricks and mortar presence in Ireland or Britain within the next 18 months.