Built to Last: 1800FLOWERS.COM's Jim McCann Gets Down to Business

FMC Fast Chat takes you inside the news so you can be in the know in 30 minutes. Hosted by Fair Media Council CEO and Executive Director Jaci Clement, Fast Chat features notables in news, media, and business.

Thank you for joining us. I'm Jaci Clement, and this is the podcast from the Fair Media Council. Today we're very lucky to have with us as our guest Jim McCann. Who is the founder and executive chairman of 1-800-Flowers.com. Jim, thanks so much for being with us today.

Nice to be with you, Jaci.

So it's good to see you. And really, the, the reason we want to have you with us today is from what we do at the Fair Media Council. We focus a lot on news coverage and what the news is covering, as well as what it's not covering. And when it comes to business news in particular, a lot of what we see focuses on startups. You know, the sexy technology company that just got a bunch of venture capital funding that's just starting up and burning through its money. Or now that we're, we're through the pandemic, a lot of the business news focuses on the businesses that are struggling and not surviving. And then in between those 2 posts, I have someone like you, which is a rarity, which is you started a business back in '76, I believe. with one flower shop. You've built it into a household name, and you've survived the test of time. So what I want to talk to you really about is how do you do that? How do you build a company that lasts and survives all of the craziness that the world goes through? How do you stay relevant? And probably let me start with what may be the hardest question, which is what do you actually do all day at this point in your career?

Well, I can't figure it out myself, Jaci. It's a I'm awfully busy, sometimes busy being busy, but it's a— because I'm no longer the CEO of Flowers, I have the luxury of focusing my attention on the future, on the future of Flowers. I'm not as caught up in the day-to-day, although I'm still connected to it. But my brother Chris has been the CEO for over 5 years now.

Wow.

And so he runs the company, has a great management team, a long long-tenured management team that does a terrific job there. So I get to focus now on the things that will influence our future. So I have a small team of people that I work with, and we focus on innovation, new relationships, new products, new partnerships, new functionality. Uh, we, uh, we focus a lot more on strategy and development, so business development, M&A, and of course, uh, looking over the shoulder of the talented people we have in our marketing team. So that would be the 3 areas I focus most on. And as the chairman of the board, I get to harness the talents of a very, very talented board that we have.

Mm-hmm.

To plug them into the areas of interest for the company, of need for the company, and tap into their talents to help us to evolve and grow. So it's a full schedule. And because of some of the things that we've innovated in the last year, uh, there's a lot more editorial that we as a team, or me individually, uh, that, that I'm involved in now.

Okay, so you mentioned this past year. Is that part of a pivot due to COVID?

Well, sure.

I don't know if you heard about it, but this COVID thing had quite an impact on us all.

I suspected as much.

Okay. It had a huge impact on, on everything, on everybody. You mentioned, uh, in your opening comments about the, uh, businesses that aren't making it, which is really, really sad, uh, to see. Uh, I was all over Long Island on Saturday. I had appointments on the North Shore, I had appointments, uh, out east, appointments on the South Shore, and, uh, I, I noticed wherever I went that there are still way too many retail shops closed. And that pains me as a retailer, as a merchant who still loves the interactivity with people. I hope that rights itself in the next 12 to 24 months as we emerge from COVID and people are comfortable going about their activities in person, that that'll correct itself. But that's because it has consequences beyond those individual people. their families and their employees, it has a big impact on each of those towns. So I hope that, hope that writes itself.

Yeah, so how— I mean, when you're in the gift sending business, basically. Now, I don't know if people understand that 1-800-Flowers is actually an umbrella for a lot of other companies, such as— I have a long list here, but it includes 800baskets.com, Cheryl's Cookies, Harry and David, which by the way, that ice cream sampler gift thing is one of my favorites to send.

Which is really interesting.

Sherry's Berries, um, Wooferman's Bakery. I mean, the list goes on. You even have Simply Chocolate in there. Um, you know, over the past 2 years, in a way, people needed to send gifts because there was no, you know, in-person contact and things of that sort. So I hate to phrase it this way, but was the pandemic actually good for you in certain ways?

Well, it was good and bad, mostly good. What I mean by that is, from a demand point of view, it was good. Clearly, we had all the challenges that every other company had in terms of keeping our people healthy, our customers healthy, keeping our business functioning and running. So it was all about safety. And like every company, especially one that employs a lot of people, we did have our our tragedies among our team members all over the country. Relatively modest in scale and number, but any one is a terrible loss. So we've had that challenge as everyone has had. But as you look in terms of what the impact on business beyond the obvious in terms of loss and pain was, demand. As you pointed out, people weren't able to anywhere. They weren't able to interact in person, and they felt like they needed to connect more than ever. And the options were a lot fewer. So a company like ours that you could access by telephone or digitally through our websites and through our apps, it drove demand up dramatically for us. I wouldn't have known that that would happen. I wouldn't have predicted that, but in the first few days back in March of 2020 or 2 years ago, the demand just took off. So it was a real struggle while we went from being primarily an office-based, place-based company one day to being remote the next, as so many companies had to. The good news, technology allowed us to do that. And we were pretty prepared having been a digital company for so long. we were in pretty good position to respond and go digitally. So we had, how do we keep our people safe? And how do we keep operating? And how do we become a digital company overnight? All of which happened in short order. And I'm proud to tell you that the management team led by my brother Chris did a fantastic job of coping with that. And we did the best we could in terms of keeping up with demand. Frankly, we just ran out of capacity and we ran out of product. many, many times over those first 6 or 7 months just because the demand was so overwhelming. And now you see the other end of it, which is we're still growing on top of last year's extraordinary growth. And that's a good thing. But this year we're coping with another challenge. And that's our job as business people, as business managers, as entrepreneurs of sorts, is to, is to manage the challenges. And the challenges this year and for the past, uh, 7 or 8 or 9 months now has been a spiraling cost. So you have inflation, you have a scarcity of labor everywhere, everywhere around the country. We have, uh, a challenge in terms of freight cost, fuel cost, uh, container costs, shipping our packaging and our products that we would get from Asia and other ports abroad, really, really challenging. So the good news is demand was there. The challenge was that the cost spiraled up fairly dramatically. And so we had to spend to keep up with our customer need and demand. And so we grew, but our bottom line wasn't what we would hope it would be for the holiday quarter, the 4th calendar quarter, because our cost escalated dramatically. We're starting to see that temper a bit now. And hopefully going forward, we see a little bit better balance between demand and the cost of us to fulfill that demand.

Okay. Usually when you get a big company like yours, the challenge is to be nimble because there's so many people spread out across, you know, the globe basically of dealing with what they need to deal with here. How do you manage, or do you have any advice you can give to people when you have such a complicated landscape to manage, to be able to, you know, from ordering a product to getting it to the customer. How do you do that when there's so many channels something has to go through in order to fulfill the request?

Yeah, it's a, it's a challenge because we become a little bit more complex as a company every day. You can't manage that complexity without good management. without a good digital capability. That is, you have to be a digital company. You can't, uh, you can't stay with the ways of the old because you have to take costs out, you have to be efficient, and you have to be able to respond and report to your customer in real time. So being digital is just a necessity in almost every business, uh, that, that I can think of. So both of those. And then, uh, finally, from a team member's point of view, you have to have a culture and invest in a culture that demands the best of people. They're not going to be watched all the time. So the definition of culture is what people do when no one's watching. And the attitude about serving the customer and going above and beyond is something we invest a great deal of time and effort in so that we have a culture that's service-oriented, that's innovation thinking, leaning toward innovation all the time, and embraces a constant change from a digital point of view. So those are things that we focus on, and if we do that, then, then we get better all the time. And I'm proud to tell you that we measure that, and we do— we're good and we get better all the time.

Okay, all right. Now, one of your hallmarks of leadership, though, is your communication skills, because you are extraordinary both as a public speaker Um, but also as a business leader. So I'm wondering, um, you know, when it, when it comes to talking to employees internally, what kind of mechanisms do you use?

Well, Jacqui, the, the, the tools that we use for communications have changed dramatically, even in the last couple of years, uh, especially during COVID Uh, and it's both— and the lines between our communication with our Customers are our community and our team members, uh, are Blurring.

Yeah.

It's a similar communication path and, and oftentimes a common element.

Okay.

So in the very beginning of COVID 2 years ago, March 2 years ago, we didn't know exactly what to do. And should we spend money on marketing? Should we market? And, uh, I took to writing a letter to our customers. And part of the reason for that was to teach us as team members to think not of our customers as customers, but more and more to think of them as members of a community.

Okay.

And we started writing this letter, this newsletter, and we call it the Celebrations Pulse. And here's a guy who had a hard time ever getting a term paper in school in time. And then all of a sudden, committed to writing a letter to our customers every week, uh, which is, uh, like a lot like a term paper.

Yeah.

Only it comes a lot more from the heart. And we, we never use it to try and sell, uh, but we use it to, uh, to share what we were thinking, what we were going through. I mean, you said before that we're a gift company, and indeed we are, but what we see ourselves as is a relationship company. That is, we're in the business of helping our customers have more and better relationships. And we do that by incenting them and inciting them to express themselves and connect to all the important people in their lives. And if they do that more deliberately, more vigorously, more frequently, they're going to have better relationships. And if they have better relationships, we have a social— I guess a selfish motivation here. Because, Jaci, if you have more and better relationships, there are going to be more occasions when you want to say happy birthday or get well or congratulations on the new baby. And we have an awfully nice line of gifts to help you if that's the way you need and want to express yourself. So, uh, the Celebrations Pulse newsletter that we write every Sunday now has a circulation of about 7.5 million people.

Wow.

It's growing quite, quite rapidly. which, by the way, is 3 times the circulation of Time magazine.

Okay.

Things have changed. But that Celebrations Pulse isn't just meant for our customers in our community. It's also meant for our team members in our community and our vendors and our floral partners and, uh, all of our partners. And I'm proud to tell you that a good many of them read it regularly. Oftentimes we write about different team members, different things we say. So by accident, we created another vehicle for us to connect and express ourselves to our community, which includes our team members and our customers and of course other stakeholders. So that's something that evolved at the very beginning of COVID And COVID then challenged us to say, From an innovation point of view, remember I have a few very talented people who work directly with me, and we had all these things we wanted to do, but we were taking a long time to get to them. Well, COVID gave us an opportunity because the rest of the house, Chris and the management team, was so busy trying to keep up with the demands of the crisis.

Right.

Demand that was coming in, logistics, supply, keeping people safe. new requirements of partitions, glass, masks, all of that, it allowed us to accelerate our efforts, Jaci, on the innovation side and do more of the things that we wanted to do quicker than we would have without COVID. So I'll give you a couple of examples.

Sure.

Before COVID we instituted a program— sympathy expression is an important, uh, an important category for us as florists. So when there is a death in a family or in your community or in your network of friends or coworkers, the way you express yourself, whether you send a food gift from Harry David to their home or floral arrangement to a chapel or their home or their office, that's an important category for us. But for florists, it's been a declining category for over 20 years, yet it's still important. So we said, well, how do we— can we market that category?

No.

So what we decided to do was to lean into the idea of think about your customers as people you can serve, and in serving them, earn their appreciation and maybe consideration when a gift is appropriate. So what we did was we created a whole educational program of information about sympathy, uh, different rites and rituals by religion, the appropriate things to say. And we said, we aren't the experts, but we sure know where to go and find them. So we gathered all this information, we created all this programming, and I wrote a series of 9 different, uh, white papers on the impact of COVID on the, on the death care industry. You know, remember there were no, no, uh, ceremonies taking place.

Right.

People were saying, you know, so-and-so passed and we're going to have just a very immediate family service. And then when COVID lifts, we'll, we'll find a way to come and celebrate Joe's life. Well, uh, we all got those notices and we were all unable to express ourselves. And so it changed that, the category. So we never bought an ad, and we still haven't, to say we have great sympathy gifts.

Mm-hmm.

But we provided information and, uh, and answered a lot of questions and created an environment. In fact, another Long Islander who I'm sure you know, John Tesh, is a friend, and he has a terrific radio program syndicated on, I think, about 400 different radio stations around the country. And we went to John and said, John, we'd like to talk with your audience, uh, your, your community about sympathy and sympathy questions, uh, but we don't want to do it in an advertising kind of form. Can we just have a dialogue with your customers, your community members, and, and share that information with them? So we've done a series of Facebook Live broadcast with experts and, and our guest on John's program for several years now. And I'm here to tell you that it worked because our community has expressed their appreciation for the fact that we, we invest a lot of time, money, and energy to have the right information for them, the right answers to their questions, or answer their specific questions, because that's a category that's been growing for us and growing quite quite dramatically, frankly. But it taught us internally that the idea of marketing has changed. And just buying ads and say, we got cheaper or better stuff than everybody else doesn't work. But if you do something to serve your audience and really engage your audience, then, then that's the new kind of marketing that we're engaged in. And COVID, COVID allowed us to learn that in a kind of rapid form. So We have The Pulse, which is the letter we write every Sunday. We have the whole sympathy program. We created a whole lot of experiences. Now, of course, I'll tell you a quick story. We recently acquired a company called Alice's Table. And Alice is a terrific young entrepreneur. And she created a company to teach people in person how to make floral arrangements as a fun and creative thing to do. Well, we are on Monday, March 19th— not 19th, Monday, March 9th, 2020.

Yeah.

Alice and her team from Boston came down to Long Island to have a celebratory dinner to celebrate our new partnership, not an acquisition. And on March 11th, Wednesday, was when we realized that this was real and the world was shutting down and things had changed. Now, Alice's business was all about in-person design. And she had instructors all over the country. And she called me on Thursday morning and said, oh my God, we just had a celebratory dinner. I'm out of business. And Chris and I said, Alice, calm down.

Yeah.

Let's think this through. We're gonna have to learn to do this digitally. And indeed she did, working with our team and her team. And last year we had, through all our different classes, probably a quarter of a million people attend one of our classes or our dinners or our book clubs, all virtually. And we acquired Alice in the very beginning of this calendar year, January 1st or thereabouts, because we had built such a good relationship together. We want her to build it even grander. So we're not just doing flower arranging classes anymore, we're doing charcuterie board making in our Harry and David brand. We do our Harry and David, uh, Dinners of the Month, uh, where we ship you the dinner. We can do it virtually or in person. Now we can do both. So we've created a whole cast of experiences, classes of all different kinds, dinners, book clubs, in person when we can, virtually all the time. And our goal is to have a couple of few million people in the next year or 2 come and engage with us in those classes. Now, is that marketing, Jaci? I guess, but— and I don't need to do a lot of research to say that if Jaci Clement and her sister-in-law get a gift certificate for a class and they come to one of our classes virtually or in person, Mm-hmm. and they have a glass of wine and they make a nice floral arrangement, they have a Cheryl's cookie, and they relax for an hour and a half, 2 hours, and they post pictures on Instagram of the things they made.

Right.

And they get to know our instructor and they get to know other people in the class and they're looking at the Facebook pictures and the Instagram pictures of what everyone else is doing, that they're engaged and they're having a real connection with us. And I think they have a different relationship with us because I know we have a very different relationship with them after that experience. So COVID forced us to say, how do we market differently? How do we engage people differently and how do we serve them differently? So from that respect, it forced us to accelerate our innovation, and I'm sure glad we did.

Okay, but not so fast, McCann, because while you're talking, what comes to mind here is the fact that you actually have a social work background, and a lot of what you're talking about sounds like you're coming full circle with, with your interests as well as your work.

I guess, I guess that's the case, uh, Jacqui. Uh, I spent my— I've only had 2, 2 career kind of jobs. One was in the social services. I worked in and ran a home for teenage boys, and I loved that work. I wasn't very good at it to begin with, but I, I had good mentors and I learned, and, and it was a great and wonderful growth experience for me personally and professionally. And I would say that my job today isn't a lot different. It's how do you, uh, how do you organize people into a group? How do you develop relationships with people one-on-one like I had to with those 10 boys in the first group home I lived in? How do you let them know you care? How do you let them know what the rules are? There has to be rules.

Okay.

How do you encourage them to accomplish more than they ever thought they could?

How did they—

how do you teach them they can accomplish more if they partner up. And if they have a healthy, safe, caring environment, they can grow and succeed and fail.

Yeah.

And so my job then, I guess you're right, isn't so different than it is today.

Okay. All right. What would you say out of your career, some of the best lessons that you've learned? Either things you've done right or wrong? That may stand out in your mind.

Well, I think it's, it's where we started our conversation today, Jaci. It's, it's all about relationship.

Yeah.

No matter what we do, how we feel, how we measure our success, how we, how we feel about ourselves, how we feel about our other people around us, are all based on the depth and breadth of relationships that we have. Uh, and, and we've learned a lot this year. Uh, we created a, a council of some of the foremost psychologists in this country, all of whom are COVID buddies. I've never met them in person.

Okay.

But I feel very, very close to them, uh, for having met them and engaged with them and asked them to help us over the last couple of years to bring some good advice and answer our questions or answer questions that we've heard from, from within our community. Things like last summer, how to, how to structure the summer for your kids who had missed a lot of school, missed a lot of social development, a lot of athletic development. And going out to some of the foremost experts, Dan Willingham at the University of Virginia, George Everly at Johns Hopkins School of Public Health, Chloe Carmichael, a renowned psychologist and therapists here in New York City and Florida and get them to help us answer our questions and share that with our community. So yeah, the work is similar, uh, Jacqui, and, uh, it's all about relationships. And they've taught us and we've learned from them, uh, how to get— George, George, at the very beginning of COVID George Everly, uh, told us number one This is a challenging, very challenging time from a relationship point of view. And he told us, invest in the relationships you have, and here's how. And think about relationships that have waned in your life and go and try and resurrect them if you think they might be worthwhile resurrecting. The relationship you've dreamt of, go make it happen. And he gave us prescriptive skills on all that, because our degree of happiness is directly related to the health and wellness of the relationships in our life. Our relationships with our partners, with our coworkers, our relationship with the barista who you haven't seen in a couple of years because you're not going out for a cup of coffee anymore. It's those incidental relationships. All of them matter. But at the end of the day, investing in close personal intimate relationships asking people who really know and had great education and experiences, how do we invest in those relationships, especially when we can't have contact? How do we—

how do we—

how are we deliberate about it? How do we have a— you know, we all make New Year's resolutions. How do we develop a plan to invest in the relationships in our life? How do we use the power, the power that each of us has? To change how someone else feels in your life today. So, Jackie, you just said some nice things about me, changed how I feel. And that's your power. And my power is to do the same thing. So to have a nice greeting for someone who I haven't seen in a while, check in on them, see how they're doing. Uh, it's, it's— at the end of the day, it's not how much you have. It's not where you live in a fancy community like you do, Jackie, with that German Shepherd who's— In your face all the time. But that's a relationship.

Yeah.

And all of those relationships matter. And we're just lucky enough to happen by accident to be in a business that's about fostering relationships in your life. And if we can help you to do that, if we can remind you, 2 weeks ago, 2 weeks ago, a week and a half ago, Friday was National Sons Day. And I'm privileged to have 3 children, 2 of whom are sons, and my daughter married a wonderful young man who's a— who I consider to be a son too. And I encourage people in those celebrations, Pulse, to think about the people who you have who are sons or you have a son-like relationship with.

Okay.

And take a minute to tell them how they feel. And, you know, it was the end of the day on Friday, and I encouraged so many people to do that and had so many interactions. And I said, oh my goodness, I have to make sure to follow my own advice here. And I had a terrific Friday night because I sat down and simply texted both my sons and my son-in-law with a note to each of them about how I felt about them and how proud I was of them. And they each texted back. I had the best night's sleep in a long time that night because of the wonderful sentiments that I got back from my 3 guys, uh, that day. And it's just indicative of how we feel and how successful we are is a direct correlation to the depth and breadth of relationships we have. And it takes work and it takes investment, but you can make— they can always be better and they can always be more.

Well, that's some great advice there. We do have a question from the audience, which is, uh, they're wondering if you do any programs specifically for small business owners.

We do. Most of the small business owners we focus on are in our network, so we call our network BloomNet, and that's made up now of thousands of florists around the country who we've been working with for many years. And the second thing, there's a new component to that which is called BloomNet Gourmet.

Okay.

Because now, as you mentioned in your opening comments, that we have a company called Shari's Berries, which are those colossal Yeah. Strawberries dipped in chocolate. And so we have a network of shops that make— gourmet shops that make those for us, for our customers in each market around the country. So we have BloomNet, our floral network, and BloomNet Gourmet, which is all of our food gifts now, some of our gift baskets and food gifts. So we have a lot of programming, both video and direct and in-person when we're able to do that, to how to make their businesses better, stronger, more profitable. how to employ technology in their business. So yes, we have a whole suite of business-focused services in what we call BloomNet.

Got it. Now, I'm wondering though, I mean, when you're Jim McCann, there must be a lot of pressure on you when you decide to send someone a gift.

There is.

How do you do that?

Well, there are a couple of people in my shop who I go to regularly for help and advice in terms of suggestions. And I tend to focus on the new thing because I want to hear how people respond. So this holiday passed, we bought a company in our Harry David brand called Vital Choice.

Okay.

And Vital Choice is some terrific fellas up in the Northwest Seattle area who are fanatics about the fact that food needs to be good and healthy. And farm-raised fish isn't as good or healthy as it should be, in their opinion. So, they focus on only live line-caught salmon and other fish of the Northwest. So, Vital Choice. So, it's cod, halibut, and of course salmon. And so, this holiday, it was easy. It was a new company, new team, new to our platform. So, I sent out a lot of a lot of fresh frozen fish and got a lot of rave reviews because it really is different.

All right, good. Now we actually have to wrap up, so I've got one final question for you, which is kind of a classic ending to our Fast Chats, which is just this: what's the best part about being Jim McCann?

I, I think it's— the best part is I've always been curious. Maybe precocious, but certainly curious. Oldest of 5 children, always had questions. My dad was a small businessman. He had a painting contracting business. So always curious about that, curious about business, learned a lot from him and his family in that business. And the best part about being me is I get to scratch that curiosity itch and I get to go learn a lot about new things. I, I visited on Saturday. I told you it was all around Long Island. I visited with a wonderful guy, uh, who has a hydroponic lettuce growing business.

Huh, okay.

I visited with him on Saturday morning. And, uh, just to be with someone who's smart and, uh, and knowledgeable and curious like he is gets my curiosity going too. So the best part is I've always been curious, and now I get to go check into all those things I'm curious about.

Oh, that's great. Thank you so much for spending this time with us. It's been so much fun to catch up, and I wish you great success with everything you're working on now. And if you need us, we're here for anything we can help you with.

Jaci, I've always been a fan of yours and admirer of what you do, and I look forward to when you can do those things in person again, and I hope it's very soon.

Thank you.

The Fair Media Council is a 501 nonprofit organization advocating for quality news and working to create a media-savvy society. For more information about the Fair Media Council and upcoming Fast Chat shows, check out fairmediacouncil.org.

Thank you.