1-800-Flowers' revenue increased 12% in the last quarter. The company's CMO reveals how it's adapting its business and advertising as people send more flowers during the pandemic.
Business Insider has launched a regular series where we talk to chief marketing officers about how they are confronting challenges from data-driven marketing to in-housing. While some companies grapple with the fallout of the coronavirus on their businesses, 1-800-Flowers's business is blossoming, with revenue up more than 12% year-over-year in the most recent quarter. In the second installment of the series, we talked to 1-800-Flowers CMO Amit Shah about how the company is adapting its business as people send more flowers, how it's increasing its ad spending, and why product and marketing need to work more closely together. Click here for more BI Prime stories.
While some companies are grappling with the fallout of the coronavirus on their businesses, 1-800-Flowers's business is blossoming, with revenue up more than 12% year-over-year in the most recent quarter. In the second installment of our new CMO series, we talked to its CMO Amit Shah about how the company is adapting its business as more people send flowers, how it's increasing ad spending, and why product and marketing need to work more closely together. The following interview has been edited and condensed for clarity. Tanya Dua: Some companies have been hit hard by the coronavirus, but it's been the opposite for you? Amit Shah: We find ourselves being leaned on even more as customers seek more meaningful and deeper connections. Initially, we saw a softer consumer demand for floral gifts. We have since seen the pattern reverse itself as customers adapt to the new environment and send gifts. Everyday occasions – which have always been the biggest part of our floral business – have taken on new meaning as people want to reach out to celebrate birthdays, new babies, and anniversaries from afar. We've seen an increase in floral gifts being sent "just because." Dua: How has this impacted your business? Shah: Companies that have embraced e-commerce have seen a disproportionate increase in customer acquisition and outcomes. We have had e-commerce for a long time, so we are seeing our strengths play out in terms of our growth. Our total third-quarter revenues increased 12.2%, and we've reaffirmed our growth guidance for the fiscal year 2020, with a total consolidated revenue growth of 8-9% compared to last year. Dua: How are your strengths are playing out? Shah: We have a robust mobile app and optimized mobile site and that's paying off. During the peak holidays, including Mother's Day, the percentage of mobile traffic is approximately 65%. Mother's Day is like the Super Bowl for us, and mobile orders accounted for approximately 45% of our Mother's Day revenue this year. We were also an early adopter of Apple Pay, and we have benefitted from that, as with people's increasing adoption of mobile, their usage of Apple Pay has also increased. We have done a lot of testing with where the button should be placed to make it the easiest for customers to check out. We were also the first company in the gifting space to embrace Venmo. Dua: How are you adapting the business to meet this increased demand? Shah: We are expanding on our mission of facilitating expression, connection and celebration. You can obviously buy and send our products, but another form of expression is the free e-cards that you can send from our website. We have launched the "Connection Community" platform with Wisdo, which lets people seek support and build meaningful connections with others who may be going through similar things in life. We've built a technology called "SmartGift "that allows shoppers to send a gift even if they don't know the recipient's address. Adoption is up double digits now because a lot of people are working from home. Lastly, we are celebrating our community with our "Local Heroes campaign." We have 4,000 local florists in our network, and we have been helping them with innovative payment plans, sending demand their way. Dua: How has that affected your ad spend? Shah: We are very relevant right now, so we are not pulling back on marketing. We are taking advantage of the cost of media falling by increasing our investment in both bottom of the funnel and mid-funnel, especially search marketing. We've also increased the number of video creative that we are putting out there. So, for example, we tested TikTok and had a bunch of videos around Mother's Day on that. We've also increased our investment in the Google stack, especially YouTube. Dua: How do you think your role as a CMO has changed since the pandemic? Shah: I lead cross-functional teams across 15-plus brands, and decision-making has accelerated tremendously. I also run our product stack, and it is critical that marketing and product are intertwined. Some brands have great ads, but then when you click on them, the experience is bad. We spend a lot of time making sure that the continuum from stimulus to consumption to transaction is very seamless. On the marketing side, we've invested in a full-funnel approach. There's a strange dichotomy in the marketplace where you have brand marketers and performance marketers, and that misses the point. We want to be relevant to the right customers at the right time. The way to do that is to hold performance marketers responsible for thinking through the brand outcomes, and the brand marketers for thinking deeply about performance KPIs, and then surrounding these teams with a great creative team. Dua: What will be the biggest change in your industry and marketing in general due to the coronavirus? Shah: People will rely more on established brands. A lot of startups that have VC money go and acquire customers without really thinking about longterm connections with their communities, and that will fundamentally change. Brands that really live out their purpose are going to come out as winners. There's also going to be a great realignment of the relationship between the brands and platforms. Platforms are realizing that marketing dollars are important for their survival and that they need to work much more deeply with brands. We have experienced a lot of more deepening of conversations with the publishers and platforms than ever before.SEE ALSO: Pepsi's CMO reveals how the company is shaking up its advertising, demanding more flexibility from its agencies, and prioritizing e-commerce and data amid the pandemic Join the conversation about this story » NOW WATCH: We tested a machine that brews beer at the push of a button
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