Jim McCann, 1-800-FLOWERS.com: My First Million
Looking for a way to make some extra money back in the 1970s, Jim McCann took a side job at a flower shop on New York's Upper East Side. At the time, he didn't realize he would one day buy that shop and turn it into a multimillion-dollar floral empire now known as 1-800-FLOWERS.com. But that's exactly what happened. To get there, McCann learned to embrace evolving technologies. First, he jumped on the 1-800 bandwagon, and in 1991, when the World Wide Web was just a seed in bloom, he took his flower shop online.
Today, 1-800-FLOWERS.com boasts 30 million customers worldwide and brought in $667 million in revenue in 2010. For McCann, key decisions along the way -- and a willingness to embrace technology -- helped his business, well, blossom.
"In 1976, I was pursuing my first career in social services at St. John's, a home and school for boys in New York City. It was a wonderful and great and rewarding profession, but it's one that doesn't pay a great deal of money, so I was always doing things on the side to supplement my income.
"I came across a young man who was selling his flower shop on First Avenue, and I thought, 'Gee, that's an interesting business.' It was retail, it was one of the few businesses I could understand, it was in the floral space -- but it was no big player in the floral biz. I started working there on weekends to see how I liked it, and I did, so I ended up buying that flower shop for $10,000 from a recent real-estate transaction.
"So for the next 10 years, I worked at St. John's and I ran my flower shops on the side. Every year I bought a new flower shop. The year I bought the flower shop, it did $50,000 in sales, the next year it did $300,000 in sales, and the next shop did even more than that. Boy, we thought we were king of the hill! When we opened our third shop in 1977, we hit $1 million in revenue, but revenue doesn't matter as much as the bottom line -- and it wasn't very much bottom line, but we knew we were on our way to something bigger.
"This organization called 800-FLOWERS had started out of Texas and approached us to be a fulfilling florist for them in New York City. We did that, and lo and behold it dried up and went away. I contacted them and, long story short, ended up buying the company and the 800-FLOWERS brand.
"Everyone in the flower business told me that people didn't want to order by telephone, they didn't want to do it seven days a week, they certainly didn't want to do it 24 hours a day and they weren't interested in using their credit card over the telephone. I didn't know enough to know they were wrong, so I just went ahead and did it anyway. I changed the name to 1-800-FLOWERS in 1986.
"We were riding the wave of the technology of the era -- 800 calling -- but we knew we had changed the way the floral industry worked, so we had our antennae up looking for the next disruptive technology that could knock us out of the box. Chris [McCann, Jim's younger brother and the current president of 1-800-FLOWERS.com] always had us exploring new technologies that were emerging. There were probably 50 things we tried that didn't work very well. But one of them was this not-yet-defined world, not-yet-called the Internet. In 1991, when we had our own website, it was pretty lonely -- no one could find you. There was no Google, there was no browser. It wasn't until the mid-1990s when Netscape came along and widely distributed the browser that organized the Internet so you could find things. So it was 1995 when the Internet really started to matter to us, and by 1997 it was clear that this emerging 'Internet' was going to change the way we did everything. When we did $1 million online, I distinctly remember my brother jumping up and down cheering with this ragtag group of people. It was just a very exhilarating moment.
"As a company, we've gone through four waves. The first wave was retail stores, the second wave was the 1-800 number, betting on the Internet was our third wave and now we're on our fourth wave. Like a wave hitting the beach, waves are often three-headed -- right now, it's everything video, everything mobile and social. Now, social media is very important to us because we've always viewed technology as a way to mimic the relationship we had on First Avenue with our first store, where our 30 very best customers would stop by our shop to have a mug of coffee and share restaurant recommendations. As your customer base grows, the only way you can hope to maintain that level of intimacy is through the effective use of emerging technologies.
"My job at the company today is to make sure that we're inviting our customers in behind the curtain and making this their company, their flower shop, so they can have a voice in the products we carry, how we market ourselves, how we dialogue with our customers. It's fun and exciting to have your customers in your office every day. This is what we dreamt about and now it's coming true. Social media gives us a way to think like we have one flower shop, but instead of 30 customers, we have 30 million customers. Now they don't come in just when they're on the way to the dry cleaners, but they come any time because there is no curtain -- it's been ripped off. If we can truly engage with our customers and have genuine relationships with them and let them have a stake in the company, then we can go from being a commerce website to a social commerce company.
"When the recession hit, it had an impact on us. We're a consumer-facing company that sells discretionary products. We've had to rethink price points and adjust our expense posture to make sure we're lean and as efficient as can be. We've done a lot, but there's still a lot more we can do, and we're a better company today for having gone through the recession. Some parts of our business are doing very well, other parts are a littler slower to recover, but recovery is clearly on the horizon.
"We've been at it now for 34 years, and when I could make payroll without sweating every week, I had the suspicion that it was going to be a business that is going to be around for a while. And it took a long time to get there. We'd invest in 1-800-FLOWERS and it'd knock our profits back down again, and then we'd invest in the Internet and it'd knock it back again! We can make payroll comfortably now, and now we're focused on making the right investment in the new technologies and the right brands extensions. I think the challenges for us are good and high-class challenges, meaning there are so many opportunities that we need criteria to pick where we'll make our bets and invest our capital. We now have 4,000 employees and have a physical presence in U.S., Canada and United Kingdom, but Bloomnet, our network of flowers shops, has affiliates all over the world.
"The flower business is a pretty special business -- it's filled with very talented and caring people who deliver smiles. Yes, there's a business to it, and yes, it's a difficult business, but it's also rewarding in a way that not many businesses are."
The original version of this article appeared on AOL Small Business on 2/24/11.