New initiatives in full bloom at 1-800-Flowers.com
1-800-Flowers.com Inc. will continue to grow as a direct marketer and web retailer by leveraging its infrastructure and various acquisitions, president Chris McCann told investment bankers and others at a recent investor’s conference.
Speaking at the CIBC World Markets Consumer Growth Conference in Boston, McCann says 1-800-Flowers.com, No. 35 in the Internet Retailer Top 500 Guide to Retail Web Sites, is on track to generate annual sales of more than $200 million in its specialty gifts business—which includes brands such as Plow & Hearth, The Popcorn Factory, Cheryl & Co., Fannie May Confections Brands, GreatFood.com, HearthSong, Magic Cabin and The WineTasting Network—by leveraging its infrastructure and marketing database.
An established e-commerce operation has helped 1-800-Flowers grow The Popcorn Factory’s web sales to around 40% of total sales from almost no e-commerce sales just a few years ago; Cheryl & Co’s web sales have increased from about 10% of all revenue to between 35% and 40% today, he says.
Having a marketing database of nearly 27 million names also is helping 1-800-Flowers to launch new e-commerce sites and reduce its customer acquisition costs. For instance, 1-800-Flowers is launching 1800Baskets.com, a new gift baskets site, using Cheryl & Co. to expedite merchandising. A bigger operation also has helped 1-800-Flowers reduce its overall acquisition costs to about $18 per customer and $12 for a floral customer.
Though 1-800-Flowers sells through various channels, the web is the company’s biggest. “The online channel drives growth,” McCann says. Some analysts expect 1-800-Flowers to post e-commerce sales of $510 million in 2006 and $770 million in 2007. The company’s expansion also may help drive more gift-giving sales. “There are 16 occasions per year that we can leverage for opportunities,” McCann says. “We are going to increase lifetime value to the customer.
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