McCann, James F.

(1951-)
1–800–FLOWERS.com, Inc.

Overview

From one small flower shop, James McCann established an international retailing empire. His familiar face appears in the ads for 1–800–FLOWERS, the telephone retailer that he purchased and transformed into a business with worldwide sales of over $400 million and more than 2,000 employees. McCann's success can be attributed to his insistence on impeccable service, his smart marketing, and a unique management style. One of the pioneers of toll–free telephone number sales, McCann continued exploring new territory by becoming the first seller on America Online and further expanding the company's click–and–order power with its own Web site as a major sales channel of the company's floral products and gifts.

Personal Life

McCann lives on Long Island, New York, with his wife Marylou. They have three children: Erin, Jimmy, and Matthew. His hobbies include golf and jogging, but surprisingly not gardening, and credits his wife as the green thumb in the family. He revealed to Fast Company in 1997 that one of his favorite online bookmarks was the Web site for the television show Seinfeld, and added, "A Seinfeld quiz is one of the final steps in our hiring process." McCann serves on the board of several companies, including PETCO, Inc., Gateway 2000, OfficeMax, Inc., and the National Retail Federation. Active on the speaking circuit, he was named Toastmaster International's Outstanding Business Speaker in 1997. He has gained many other honors over the years, including Merrill Lynch and Inc. magazine's Entrepreneur of the Year award, Chain StoreExecutive magazine's Retailer of the Year award, Direct Marketer of the Year from Direct Marketing Day New York, Advocate of the Year award from Ernst & Young and the Long Island Association, and has been named among the Top Business 100 in Irish America Magazine. Among his humanitarian efforts, McCann supports programs for the developmentally disabled.

McCann was born July 28, 1951, in Queens, New York. His father was a painting contractor and his mother was a homemaker. He is the oldest of five siblings, several of whom work for 1–800–FLOWERS.com, including youngest brother Christopher G. McCann, who is president and director of the company. Of their work relationship, McCann told Management Review, "Because there's 10 years' difference between us, we were never rivals. We've always had a good relationship. We've never had an argument that we'll admit to. We disagree all the time, and I defer to him more often than not because he's one of the most talented operations managers there is." McCann's siblings compare growing up with the clean–cut young entrepreneur to growing up with Alex P. Keaton from the television series Family Ties. McCann remembers often getting in trouble as a child for daydreaming, which he credits as part of the reason for his success.

His first job was working for his family's painting business. Stuck with doing many of the dirty and exhausting chores the other men didn't want to do, McCann told Management Review that as he walked by a clothing store and saw a man with a shirt and tie on, he remembered thinking, "I want to get a job like that." McCann did achieve his one–time goal of becoming a retail clothing salesman briefly, but had a new goal in mind: becoming a policeman. McCann graduated with a bachelor's degree in psychology from the John Jay College of Criminal Justice of the City University of New York in 1972. Of the working class Queens neighborhood he was raised in, McCann told Chief Executive magazine, "Where I grew up, an Irish–American kid became a priest, a cop, a bartender, or a bad guy." McCann's brief stint as a part–time bartender almost qualified him as filling two of those professions before he eventually landed a position as a counselor at the St. John's Home for Boys in Rockaway, New York, earning a mere $18,000 a year. It was at the home—working with "at–risk," underprivileged inner–city youths who were exposed to gangs, drugs, and poverty—that McCann learned the important lessons that shaped his management style. He realized that success in business is dependent on personal relationships with people. He used those lessons successfully when he eventually began his first business.

Career Details

While Jim McCann continued to work at St. John's, the imminent arrival of his own children prompted him to think about starting up his own business on the side for extra income. He chose to go into real estate, buying rental properties and repairing them himself. Although he continued with the venture, the business was not as lucrative as he had hoped, so he decided to look into buying a franchise of some kind. While scouring the classified ads, he found a flower store called Flower World. McCann liked the fact that selling flowers provided a service that made people happy and uplifted, and he knew that people would continue to enjoy receiving flowers long into the future. McCann had unknowingly found his niche.

In order to buy the little flower shop in Manhattan, New York, McCann borrowed $10,000 from his family and friends and approached the limit on all of his credit cards. In 1976, at the age of 25, he had enough money to buy his first flower shop, but little else, at one time being unable to afford even toothpaste. He later told Success that the key for entrepreneurs to become successful is to recognize their potential and to live below their means. Not afraid to do either, McCann grew to love the flower business. With hard work and dedication to the business, he began acquiring one store after another until he had a chain called FloraPlenty, which numbered 14 stores by 1986.

Chronology: James F. McCann

1951: Born.

1972: Graduated with B.A. from John Jay College.

1976: Bought first flower shop in New York.

1986: Acquired rights to 1–800–FLOWERS number.

1992: Began selling flowers online through Compuserve.

1994: Became first vendor on America Online.

1995: Established 1–800–FLOWERS.com Web site.

1995: Changed company name to 1–800–FLOWERS.com, Inc.

1999: 1–800–FLOWERS.com went public.

In his biography Stop and Sell the Roses, McCann recounted the event that changed his life. In 1984 he heard a radio ad for 1–800–FLOWERS and was immediately intrigued by the flower company named after a toll–free telephone number. Soon after, FloraPlenty was busily fulfilling orders from 1–800–FLOWERS, and the chain really began to bloom. During this time, the orders were so large that McCann had to finally leave his job at St. John's and devote himself to his business full–time. In time, though, orders from 1–800–FLOWERS began to taper off. This firm was struggling to stay afloat under losses of millions of dollars. To revive itself, 1–800–FLOWERS offered McCann a management position. Rather than accept their offer, McCann opted instead to buy them out for $2 million. He immediately sold off all the company's assets, leaving him with the rights to the 1–800–FLOWERS telephone number and $6 million in debt. Ironically, he didn't even have phone service for the toll–free business because this service had been cut off.

McCann learned from his successors' failures: the lack of a reliable network of florists and consistent service during periods of heavy orders spelled the loss of business, particularly from returning customers. This knowledge enabled him to base his strategy on repeat business, which costs much less than expensive advertising, promotion, and overhead aimed at attracting new customers. In sum, relationships with customers were the key.

McCann and his brother Chris ran the 1–800–FLOWERS business from the basement of some of his flower shops. About the brothers' expectations for the fledgling business, Chris McCann told RETAILTECH in 2000, "We knew our investment in 800–FLOWERS would be our future, so I started learning about e–commerce, computers and applications."

In the mid–1980s, toll–free numbers were not as familiar and accepted as sales outlets as they were in later years. So McCann hired operators who were friendly and efficient as a way of alleviating the anxiety of customers who were troubled by the security issues involved with providing their credit card information in this new way. As people gradually warmed up to the growing trend of buying goods over the telephone, the business steadily began to grow through the early 1990s.

Marketing savvy and McCann's dedication to excellent service explain why the company, once $6 million in debt, became a $75 million–a–year business by 1993. Heavy television marketing of the 1–800–FLOWERS brand name fueled recognition of the company and its expanding services. Commenting on company service and reliability, McCann told Success, "To make sure the experience is perfect every time, we work exclusively with about 2,500 hand–picked florists in a network we call BloomNet. We give the top 100 members of BloomNet 120 orders per month, so when we call a flower shop with an order, we're that shop's best customer. We get good service and monitor each order. We're open 24 hours a day, seven days a week. We need people to trust us, so we offer a 100 percent guarantee." The easy refund policy was another of McCann's successful strategies to win repeat customers.

At the same time, McCann was building the tools for great service: the telephone and computer ordering systems. The company kept detailed records of the sales history and performance of shops near each customer, data that was easily accessible to operators when a customer calls to place an order. The company also began its expansion into the concept of selling gifts other than flowers with 800–BASKETS for gift baskets and 800–GROWERS for fruit.

Using the same foresight he had applied to toll–free retailing, McCann ventured into the relatively new arena of Internet sales by entering into an agreement with Compuserve in 1992. Two years later 1–800–FLOWERS became the first vendor on America Online, and online sales climbed. In 1995, with Internet technology growing rapidly, McCann jumped with both feet into cyberspace by launching his company's own Web site and changing the company's name to 1–800–FLOWERS.com. Utilizing the same philosophy that had made his company successful, he focused once again on building customer relations. He stressed that customer email must receive prompt response. He also ensured that the online ordering process was reliable and easy to use. Finally, he wanted the Web site to be entertaining.

On August 3, 1999, 1–800–FLOWERS.com went public with shares offered at $21 each. The price rose slightly to gain $1.25 per share that day, then dropped 13 percent below the offering value for a day–end price of about $18 per share. The rapid decline was attributed by some to bad timing, as many Internet companies saw their stocks tumble during these months. Yet even two years later, 1–800–FLOWERS.com still hadn't recovered. As of October 12, 2001, its stock price was valued at $12 per share.

Stock price doesn't always tell the whole story, though. With its three sales channels—online, telephone, and storefront—1–800–FLOWERS experienced more than 50 percent growth throughout the 1990s. In 2001, with sales of $440 million and more than 2,000 employees, McCann continued to look to future technology for growth and ease of use for customers. In June 2001 he told RETAILTECH that the company is now looking toward mobile commerce.

Social and Economic Impact

James McCann is a retailing pioneer, making his company one of the first not only to utilize the toll–free 800 number, but also to take it to a new level by building his entire company and all of its brands around the novel concept. Savvy marketing strategies also contributed to success. One example is long–distance sales and delivery. McCann realized that few people knew whom to call when they needed flowers sent to someone out of town. The national advertising campaign that he launched, with himself as spokesperson, imprinted the 1–800–FLOWERS name and phone number on the public's mind as a source for flower delivery, across town or overseas. By embracing the power of technology, McCann was also one of the first to sell his flowers and gift products online, and the first retailer of any sort on America Online. The other significant area where McCann's influence has been felt in the world of retailing is his unique dedication to customer relationships, learned from his early experiences in social work and transferred to the big business environment. He is dedicated to continually looking for news ways to please customers and encourage them to remain loyal.

Sources of Information

Contact at: 1–800–FLOWERS.com, Inc.
1600 Stewart Ave.
Westbury, NY 11590
Business Phone: (516)237–6000
URL: http://www.1800flowers.com

Bibliography

"Be Perfect or Die! How 800–FLOWERS Thrives on a 3–percent Margin." Success, June 1993, 14.

Chadderdon, Lisa. "My Favorite Bookmarks—Jim McCann." Fast Company, December 1997. Available at http://pf.fastcompany.com

"Flower Talk: A Talk with Jim McCann." Management Review, March 1995, 9.

Goldman, Jane. "War of the Roses." The Industry Standard, 9 August 1999.

"Jim McCann." Westbury, NY: 1–800–FLOWERS.com. Inc., 2001. Available at http://www.1800FLOWERS.com.

"Jim McCann CEO, 1–800–FLOWERS.com." RETAILTECH Online, 1 June 2001. Available at http://209.11.43.217/retailtech.com.

"Jim McCann: Making 1–800–FLOWERS Flourish." 6 May 1998. Available at http://content.techweb.com.

McCann, Jim, and Peter Kaminsky. Stop and Sell the Roses: Lessons from Business and Life. New York: Ballantine, 1998.

Pellet, Jennifer, and George Schira. "This Bud's For You." Chief Executive (U.S.) March 1997, 24.

Warshaw, Michael. "Invest in Yourself; Get Professional Help and Diversify Your Fortune, Says the Owner of Industry Giant 1–800–FLOWERS." Success, April 1997, 27.

White, Erin. "Growing Pains on the Web: 1–800–FLOWERS.com's IPO Lesson: Coping with Wilt." Wall Street Journal, Eastern Edition, 19 August 1999, B1.