Private investment firm Comvest Partners acquires the financially troubled e-retailer, which filed for Chapter 11 bankruptcy protection in March.
One of the most stressful shopping experiences can be gift-buying. Many gift-givers fret over finding the right gift and then worry over presentation. When you add remote shopping to the mix, the stress level goes up even higher as shoppers then can worry about timeliness of delivery. Thus are the challenges of flowers, gifts and jewelry sites complicated beyond those that other online retailers face.
One of the most stressful shopping experiences can be gift-buying. Many gift-givers fret over finding the right gift and then worry over presentation. When you add remote shopping to the mix, the stress level goes up even higher as shoppers then can worry about timeliness of delivery. Thus are the challenges of flowers, gifts and jewelry sites complicated beyond the challenges that other online retailers face.
Successful online flowers, gifts and jewelry sites leverage existing brands—or find ways to play off of consumers’ confidence in other ways. 1-800-Flowers.com and Hallmark.com have built online sales through the power of their brands. Hallmark, for instance, introduced flowers to its web site a year after launch and has created a blooming flower business in spite of not being known as a flower seller in the offline world. “They can be late to the game in selling flowers and be a major player just because of who they are,” says Neil Stern, consultant with McMillan/Doolittle. “Their brand extension into floral is a great example of what you can do online that you can’t easily do in stores.”
1-800-Flowers long ago took its well-known brand—one of the first to exploit the power of long-distance, toll-free calling—online. Today, it’s a well established e-retailer and so it’s taking its operation to the next level by harnessing the power of the Internet to communicate with customers. Unlike most retailers who are simply using e-mail to promote products, 1-800-Flowers is using its e-mail database to ask customers what the company should promote. Asking customers’ opinions resulted in a hit last Valentine’s Day on a promotion that company staff had low expectations for, and the jettisoning of another promotion that the staff was enthusiastically behind. “The web is more to us than an online catalog or a way for us to reduce operational costs,” says president Chris McCann. “It’s a key way for us to establish a relationship with our customers and get them involved.” That, in turn, makes the customer more confident about shopping at 1-800-Flowers.com.
Zales Jewelers is another example of the power of a brand. Its Zales.com replicates the store experience closely. “Zales knows its Middle America consumer well and everything in the web site reflects that understanding,” says Mary Brett Whitfield, senior vice president of consultants Retail Forward Inc.
Other sites in this category use their brand power, but then build on it with their web sites. YankeeCandle.com, for one, offers candles with custom messages and presentation by employing an easy-to-use, fast-loading Flash-based customization process. The custom-candle feature is one example of YankeeCandle.com’s focus on usability that has resulted in a sale completion rate that jumped to 75% of all shopping carts started from 58% and sales growth of 27% in this year’s second half vs. last year. It’s also an example of easing a process that is difficult to execute in stores.
Where customers help manages
Lots of retailers say they’re customer-centric, but 1-800-Flowers.com takes it to another level. The multi-channel flower and gift company uses the web not just to sell product or gain customer information, but increasingly, to engage customers in the very management of its business, says president Chris McCann.
“Strategically, the web is more to us than an online catalog or a way for us to reduce operational costs. It’s a key way for us to establish a relationship with our customers and get them involved,” says McCann.
Since expanding into non-floral gifts over the past several years, 1-800-Flowers.com’s sales and repeat customer rate have expanded, too. Repeat customer rate has grown from 35% to 58% while 50% of sales are in the non-floral category. McCann says listening to customers helped point the company down that expansion road, and in the last few years, it’s fine-tuned its listening further, sometimes to dramatic effect.
Several months before last Valentine’s Day, for example, 1-800-Flowers.com assembled draft presentations of more than a dozen floral and non-floral prospects for holiday promotion and e-mailed them to tens of thousands of customers asking for their opinion. The feedback—which it could never have garnered without the web—sparked changes in promotional plans when response to one item picked by staff as a winner proved “underwhelming,” says McCann, while another for which the company had lower expectations was a hit.
“That became our top-promoted item for the holiday,” says McCann, adding that the web helps turn customers into merchandisers. In another listening exercise, the web marketing team talks to phone customers weekly to analyze the navigational flow of phone transactions in much the same way they analyze the web site clickstream—with an eye toward improving the interaction.
With expansion has come the challenge of effectively presenting a greater number of products online, a task Forrester Research Inc. analyst Carrie Johnson calls a potential “technical nightmare.” But not on 1-800-Flowers.com, which she says understands how much space on each page to devote to describing the product at hand versus exposing the rest of the product catalog through text links. “It is hard to manage that many SKUs and tag them with the appropriate category label,” she adds. “That behind-the-scenes work ultimately comes through in a very easy, clean interface. They’ve struck a good balance between being cluttered and useful, a very difficult thing to do.”
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*As reported by comScore Networks Inc.