E-commerce sales at 1800Flowers.com increased 24.6% in the fiscal first quarter of 2016 to $104.7 million from $84.0 million in the year-ago period, driven mostly by the Harry & David gourmet treats and gift business.
Also boosting the retailer’s growth was a 7.7% increase in sales in BloomNet wire service, a corporate sales and business-to-business unit. BloomNet generated $21.55 million in fiscal Q1 sales, up from $20.01 million in the year-ago period.
1-800-Flowers, No. 56 in the Internet Retailer 2015 Top 500 Guide continues to focus on cross-brand marketing with its multibrand e-commerce site. “While this initiative is still in its early stages, we continue to see incremental improvement in customer behavior in terms of enhanced retention, frequency, and lifetime value,” president Christopher McCann told analysts last week during a conference call, according to a Seeking Alpha transcript.
1-800-Flowers added tabs for Harry & David and Wolferman’s to its e-commerce site in fiscal Q1 to expose the brands to millions of potential new customers, McCann said. “In all of our market initiatives, we’re increasingly leveraging our expanded customer database with millions of engaged shoppers, as well as the new CRM (customer relationship management) tools designed to help us improve our targeting and enhance the relevance of our marketing communication.”
The retailer has a new catalog designed to feature its expanded range of gourmet gift clubs and subscription programs, and it’s testing a new multibrand kiosk model in several locations, “expanding brand awareness and reaching customers who like to do, at least, some of their holiday shopping on foot rather than online,” McCann said.
In its Harry & David business, which 1-800-Flowers acquired in September 2014, the company made revenue gains while reducing seasonal operating losses, chairman and CEO Jim McCann told analysts. The retailer did so by leveraging its shared services platform, including information technology, human resources, technology and sourcing, and it is on track to achieve $15 million in operating cost synergies originally forecast, he said.
The Harry & David brand is part of 1-800-Flowers’ gourmet food and gift baskets segment, which also includes Cheryl’s cookies, 1-800-Baskets.com, Wolferman’s, Moose Munch, Fannie May, The Popcorn Factory, FruitBouquets.com and Stockyards brands.
“Our e-commerce orders grew 18.4% to 1,557,000, compared with 1,315,000 in the year-ago period, primarily reflecting the Harry & David contributions,” chief financial officer William Shea told analysts. “Average order value during the quarter increased 5.2% to $67.26 compared with $63.92 in the prior year period. And during the quarter, we added 500,000 new customers, up 16.9% compared with 427,000 new customers in the prior year period, primarily reflecting the contributions of Harry & David in the quarter.”
For the quarter ended Sept. 27, 1-800-Flowers reported:
- E-commerce sales of $104.7 million, up 24.6% from $84.0 million in Q1 of fiscal 2015.
- Total sales of $156.0 million, up 23.1% from $126.7 million.
- Consumer floral sales of $72.9 million, a 2.0% decrease from $74.4 million.
- Gourmet food and gift baskets sales of $61.6 million, down 0.3% from $61.8 million, adjusted for the acquisition of Harry & David.
- About 1.1 million consumer orders, of which about 500,000, or 45%, were new customers.
- Net loss of $5.4 million compared with a loss of $4.6 million in the same quarter last year.