Live from Retail Systems 2006: Data Lead to Initiatives for

Chicago—You can now buy strawberry margaritas at—make that Strawberry Floral Margaritas—thanks in part to the company’s recent focus on customer intelligence and data mining. Chris McCann, president of the Carle Place, NY-based multichannel merchant, discussed this and other 1-800-Flowers initiatives during his Monday session here at Retail Systems 2006.

“If we’re going to expect our customers have a relationship with us, we have to keep improving and innovating,” McCann said. And that entails segmenting the company’s nearly 30 million-name customer database to determine what specific sectors want.

The company’s expansion into the food, wine, and gift basket marketing during the past three years is a case in point. Data mining and modeling showed that 900,000 of the 1-800-Flower brand’s 3.2 million active customers at the time were buying nonfloral gifts from other companies.

To get that portion of wallet share from its floral buyers, 1-800-Flowers acquired several food and wine merchants, including baked-goods purveyor Cheryl & Co. and wine direct marketer The Winetasting Network last year, and Fannie May Confections Brands this year. It also quietly relaunched its 1-800-Baskets brand earlier this year, to better reach gift-givers who simply don’t associate the 1-800-Flowers brand with nonfloral gifts.

Customer intelligence also led to the February launch of the company’s Fresh Rewards loyalty program. Currently it applies only to the namesake brand and not to the company’s other titles, which include country-living products merchant Plow & Hearth and toys catalogs HearthSong and Magic Cabin Dolls. The early success of the program, however, may lead the company to extend the program to other brands, however, McCann said.

And customer research such as surveys and “customer dialogues” (“We don’t call them focus groups,” McCann said, “because I like to lead them and the people at 1-800-Flowers say I’m no good at moderating focus groups”) contributed to the introduction earlier this year of the company’s Happy Hour product line. That line, which includes the Strawberry Floral Margarita, has been one of 1-800-Flowers’ most successful product launches, McCann said.

Among other successes that McCann credited to data mining and customer intelligence are a 20%-30% lift in response to its direct mail efforts; a 20% rise in orders resulting from e-mail; and a 15% increase in the number of “best customers.” This last ties in directly with the company’s expansion of its nonfloral gift offerings.

The company isn’t complacent, however. McCann admitted that “we haven’t really cracked the code” of how to leverage the 40 million names on its database of gift recipients.

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