This Valentine’s Day, gift givers will spend $2.3 billion on flowers. With delivery more popular than ever in the pandemic, vibrant arrangements of red, pink, purple, and white will make their way to doorsteps across the country, and millions will be coming from a single company: 1-800-Flowers.com, Inc.
The uniquely named company — few businesses are simultaneously a phone number and a website — urges customers to “capture her heart,” and the choices to do so are endless. There are the mixed bouquets of lilies, orchids, and tulips, with sappy names like “Sweetheart Medley” and “Love Song.” You can purchase a classic arrangement of “Two Dozen Romantic Roses” for anywhere between $59.99 and $101.99. Throw in some chocolates and spring for the nicer “prism vase” and the price goes up. If that feels a little too pedestrian, don’t worry — three dozen preserved “Magnificent Roses” in a Instagram-ready black box will run you about $300.
The story of 1-800-Flowers.com began 10 years before it even became a phone number, let alone a website. In 1976, Jim McCann paid $10,000 for a floral shop in Manhattan, on First Avenue and East 62nd Street. Gradually, he purchased a few more with the goal of becoming a chain. “I looked around and there was no McDonald’s of the flower business,” McCann told Forbes in 2017. “Once I opened, I immediately started looking for a second shop. Six months later I bought a second shop and then opened another 30.”
Today the company is run by his brother, Chris McCann. It has over 125 retail locations in 31 states and makes $1.25 billion in annual sales.
Gifts are a huge business. Between all of the holidays and obligations we encounter in our lives, it’s not surprising that the gifting industry generates so much revenue — about $131.3 billion a year. According to a 2018 Gallup survey, American adults estimated they would spend $900 on Christmas gifts alone that year.
1-800-Flowers.com has become a gifting-industry giant, selling around 20 million gifts every year. You can send someone a massive teddy bear, personalized keepsakes, and even jewelry. In fact, flowers aren’t even the real cash cow of 1-800-Flowers.com: While 40 percent of the company’s 2019 revenue came from consumer floral, 52 percent came from gourmet food and gift baskets, and 8 percent from BloomNet, an in-house network of 5,000 to 6,000 florists who help with design and local sourcing. Seventy-five percent of their flowers come through florists, but the rest originate from farms in places like Colombia, Ecuador, and California.
“What we realized was that customers were coming to us to buy flowers because they really need to send an expression and connect with someone and build a relationship with someone,” Chris McCann said in a phone interview. “We realized flowers satisfied some of those needs, but what else do people use? That’s what moved us down the road of becoming a gourmet food company.”
1-800-Flowers.com is an odd nesting doll of a corporation, as evidenced by its name. What was first an 800 number acquired in 1986 became an online storefront in 1995, at the height of the internet boom. Investing in accessible, modern methods of commerce has become a key factor in the company’s success, especially online. In 1992, 1-800-Flowers became the first partner of CompuServe, the first big commercial online service provider in America. Two years later, 1-800-Flowers became AOL’s first merchant partner, anchoring itself as an omnipresent American corporation. The brand was so strong that giving up the 800 number has been impossible, even in the age of online sales.
McCann described the changes the company has gone through in four waves. The first wave was its original 12 brick-and-mortar stores; the second, its iconic phone number; the third, its online presence. “By 1997, consumers had kind of voted that the World Wide Web was a winning technology platform, and we were well-positioned there,” he said. The fourth wave has been mobile commerce, which is rapidly expanding.
Slowly but surely, 1-800-Flowers.com has created a small kingdom of over a dozen brands under the family umbrella, with straightforward domain names such as Berries.com (it acquired Shari’s Berries, a chocolate-covered strawberry brand, last year), 1-800-Baskets.com, fruitbouquets.com (an obvious Edible Arrangements competitor), among others. You can send foods like popcorn, baked goods, steaks, and more. In 2014, the company acquired Harry & David, known for their luxurious gold-wrapped pears. Through Personalization Universe, customers can buy assorted goods like monogrammed wine glasses and custom wall art. Goodsey, which launched in 2018, seems to be a random grab bag of gifts for any occasion. Need to gift something for “National Bikini Day” on July 5? The website suggests items like a “deluxe emoji gift box” ($99) or a “commuter” cooler backpack ($65, though I recently saw a much cheaper version on Amazon).
“The world has moved into this disconnected world. And technology is so pervasive in our lives. Some are saying it’s really knocking down the human connection, and we’re well positioned to really combat that,” McCann said. “When the world is going through a loneliness epidemic, our mission is to really combat that and bring back the human connection.”
Sales dropped during the 2008 financial crisis, but that same year, the company launched a “mobile gift center” on Blackberry smartphones. The company made its first transaction on Facebook in 2009; two years later, around the time we reached “peak app,” 1-800-Flowers invested in its own mobile app.
The company intends to take its advancements further, focusing now on “conversational commerce,” meaning chatbots and voice-operated purchasing. In the past two years, 1-800-Flowers has become available on Alexa, Apple Business Chat, Google Assistant, and Bixby, which is Samsung’s virtual assistant. The investment in AI has extended in house as well. The company has integrated a virtual assistant consumers can call and a “3D and augmented reality” feature on the website, so that customers can see bouquets in detail before purchasing. Venmo has been integrated as a payment option, too.
When it comes to innovation, McCann says he wants a team who is willing to “get speeding tickets, not parking tickets.” A constant digital presence makes it hard to ignore the brand’s convenience and allows forgetful gift-givers to quickly cover their bases, with the help of various delivery methods, including FedEx, to help gifts make it to their destinations in time for occasions.
Consumer interests have shifted slightly due to the pandemic. According to the company, they’ve seen an increased demand for personalized items. Between October and December of 2020, PersonalizationMall.com grew by 50 percent. “We’ve seen that as consumers are staying home more, they are ‘nesting’ — focusing on their homes with new décor and furnishings,” McCann said. Additionally, during the 2020 holiday season, 1-800-Flowers.com saw their highest quarterly revenue and profit in company history.
What many consumers might disregard as “Hallmark holidays,” like Valentine’s Day, are inescapable under the power of the gifting industry. But it’s hard to deny the sweet feeling of receiving flowers from a loved one. The pandemic doesn’t seem to be slowing down sales, either. For Valentine’s Day 2021, the company says they anticipate delivering 14 million roses, as well as an increased demand for gift baskets, due to couples spending their holiday at home. That’s 3 million roses more than they expected to ship last year.
“Planning for a holiday like Valentine’s Day starts right after the Valentine’s Day this year,” McCann said. “The good news is that we’ve been doing this for over 40 years now. I would say we’re never perfect, but I think we get better every single holiday.”
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