Abstract
Smiles. Designed and delivered.
The doorbell rings. You hear the word, “Delivery.” When you open the door, you’re presented with a stunning vase filled with roses. You’re surprised. You’re smiling. And your whole day has changed. 1-800-Flowers (NASDAQ: FLWS) is a floral and gift retailer and distribution company in the United States. It was one of the first retailers to use a 24 x 7 toll-free telephone number and the Internet for direct sales to consumers. A decade ago, 1-800-Flowers was a business waiting eagerly for the Internet to take off. Today, the company has an e-commerce platform that can grow along with its business. For the delivery of smiles, 1-800-FLOWERS implemented more scalable, centralized e-commerce platform to support its rapid business growth. Also the company fills its orders in two ways: through a network of florists and through drop shipments. It established a florist-to-florist network called BloomNet, and is one of several floral wire services in the country today. The company was among the first retailers to partner with CompuServe and AOL, in 1992 and 1994 respectively. In April 1995, the company was one of the first retailers to establish its own Internet sales site. In 1999, the company went public on the NASDAQ stock exchange under the ticker symbol FLWS and changed its name to 1-800-FLOWERS.COM, to match its web site address. E-Commerce Growth
As the Internet started to become commercial in the 1990s, the early adopters were primarily tech-savvy males. So it only made sense that the first e-commerce business that launched on America Online was something that many men desperately needed: a 24-hour flower shop. 1-800-Flowers, a retailer that started with one flower shop in New York in 1976—and went national, thanks to its popular phone number—was in fact the first e-tailer on AOL in 1994. Today, more than half of the company’s orders are placed over the Web. 1-800-Flowers has come a long way from arranging bouquets in a small corner store. The underpinnings of the 1-800-Flowers business is now a network called BloomNet, which consists of more than 9,000 florists who fulfill orders placed through the company’s consumer and corporate Web sites, affiliate network, partners, or toll-free number. When a consumer places an order with 1-800-Flowers, the order is forwarded to a centralized transaction system that validates product availability, delivery date, and other details. Then the order is routed to BloomNet florists through an extranet called BloomLink. The distribution system allows 1-800-Flowers to fulfill orders quickly and locally, with same-day delivery options.
By 2000, the company was growing so rapidly that it decided to bring Web development and hosting in-house so it could establish a more scalable, centralized e-commerce platform. “There’s no shortage of creative business ideas here at 1-800-Flowers,” says Enzo Micali, 1-800-Flowers CTO. “We brought Web development and hosting in-house because it was such a core part of our business, and we needed the ability to implement new plans quickly and be as nimble as possible.” For starters, 1-800-Flowers built a tier-1 Web hosting center in one of its large warehouses in Madison, Virginia and signed a co-location agreement with AT&T for hosting facilities in New York and Dallas. As with any full-scale e-commerce operation, 1-800-Flowers needed to ensure that it could shift loads—transparently—to different hosting sites during peak periods so customers would see no difference in the virtual storefronts. To make sure that customer shopping carts and address books were always available, 1-800-Flowers picked Progress Software to complete its backup and recovery, and business continuity architecture. For reliable, standards-based data exchange, SonicMQ was deployed to replicate 1-800-Flowers customer information across the company’s three Web hosting sites.
Mother’s Day 2004 is a perfect example of why 1-800-Flowers needed an extremely robust, scalable, and flexible e-commerce platform. From late April until the May 11 holiday; historically the busiest time of the year for floral retailers—the total orders for flowers, candy, and gift baskets exceeded 970,000. More than 70 percent of the orders were placed online. With such high order volumes, a single hosting site could become overloaded. In such cases, for business continuity, 1-800-Flowers wanted the turnkey ability to divert traffic from its primary hosting center in New York to its replicated site hosted in Dallas or its third site in Madison—a so-called global server load-balancing (GSLB) system.
With GSLB in place, the company was able to double its capacity and have a third site for failover if needed. “When you’re dealing with millions of orders, you need the ability to scale very quickly to handle the volume—especially during major holidays like Valentine’s Day,” Micali says. “GSLB is great for risk mitigation and capacity planning.”
The critical piece of the GSLB strategy was to ensure that customers’ would never be affected when the Web site was experiencing heavy traffic—even if they had to be serviced by another hosting site. 1-800-Flowers developed a system to replicate customer information in real time so the address book, shopping cart, and account history would always be available to customers, regardless of which hosting site they were accessing. For example, a consumer can log on to 1-800-Flowers in the morning to buy flowers for her mom and load up her shopping cart via a server in New York. When she comes back in the afternoon to input mom’s shipping address and completes the order, her shopping cart looks the same, even though she landed at the Dallas hosting site—she’s none the wiser and shouldn’t have to be.

Efficiencies in IT
Implementation of VPI
1-800-Flowers.com needed a unified system for accurately scheduling agents, reporting on performance and effectiveness and distributing this information to its 2,000 contact center agents in real time across nine sites.”We’re always looking for ways to increase our productivity and effectiveness,” said Lou Orsi, Director of Vendor Relations and Strategic Projects for 1-800-Flowers.com. “Most of our reports were produced at the end of the day, and it is very difficult to react proactively when you’re not accessing information in a timely manner. We needed real-time performance reports so that agents, managers and even our executive-level team could see how we were doing on any given day at any given hour. Our goal is to continually assess what we can do to make their lives easier.” The company selected VPI Performance and VPI Coaching to handle real time distribution of key performance metrics directly to agent desktops as well as dashboard-based messaging and agent-centric eLearning.

MAS Order Management System
The MAS (McShan-Abner Systems) Order Management System, available now through BloomNet makes it simple for any flower shop to manage virtually all aspects of its business, faster and more cost-effectively.
"MAS are extremely proud to be the BloomNet preferred software provider, bringing the intuitive and profit-enhancing features of our versatile application to BloomNet Professional Florists," said Abner Maldonado, co-owner and founder. The robust MAS system, which is the premiere independent software solution of choice throughout the floral industry, includes a comprehensive suite of solutions enabling Florists to process orders, manage deliveries, keep track of inventories, leverage marketing tools for existing and potential customers, and many other functions...all with ease and speed.
Specific benefits of the MAS Order Management System include the ability to enter orders and review delivery information instantly, as well as print status reports, transmit delivery and mapping detail or trip sheets to GPS devices, track product inventories in real time, manage billing and accounts receivables, produce purchase orders, analyze sales performance, automatically create and send personalized post cards and emails to existing customers as well as future prospects, create gift and affinity cards, send electronic customer order and delivery confirmations, and much more.
Shared technology- Fresh Digital™
The 1-800-FLOWERS.COM strategy has been to grow three ways: organic growth, internal business development and strategic acquisitions. Today, it has 14 brands that sell everything from popcorn to gift baskets to gourmet food and children’s gifts. The strategy has given 1-800-FLOWERS.COM a broad and diverse portfolio, but it also created a business challenge. To fully realize the benefits of its multi brand strategy, they must be unified behind the scenes, but as is usually the case, each new acquisition brought with it a different set of business processes and technology, resulting in a large number of siloed operations that were difficult to integrate. To promote brand synergy, the company has undertaken “Fresh Digital™,” an enterprise-wide transformation initiative. “Unifying lines of business is a better approach to retail,” says Steve Bozzo, CIO at 1-800-FLOWERS.COM. By sharing resources, systems and services, they accomplish a number of things. They become a more dynamic and agile enterprise because they’re breaking down internal barriers—which will also help company to develop new business intelligence. This helps to leverage resources and services of all kinds across the brands, from information to IT to shipping to warehousing, which will let they work smarter. And by consolidating, sharing and implementing more efficient technologies as well as implementing measures like sustainable packaging and reducing our reliance on paper catalogs, company was able to reduce our environmental footprint, which puts credibility behind firm’s green marketing efforts.
The first step on the consolidation path was to give the individual brands a common e-commerce platform. The 1-800-FLOWERS.COM brand itself uses a robust e-commerce system that was developed entirely in-house and which continues to serve the company very well, with a demonstrated ability to handle even the heaviest holiday volumes. It became clear, however, that using this platform to support all of the other brands was not the best use of the company’s resources. Rolling out the 1-800-FLOWERS.COM platform to its other brands would require replicating it over and over and it was simply not the most efficient way forward. “We’re very happy with our core platform. Its performance proves we have the ability to create really strong e-commerce solutions, but fundamentally we’re not a software company—we’re a gifting company,” says Steve Bozzo. “It made more sense for us to find a best-of-breed e-commerce platform and work with it as opposed to spending a lot of time and energy creating our own. Also, by going with an industry leader, we’re leveraging its research and development dollars instead of using ours to reinvent the wheel as well as reducing the size and environmental impact of our infrastructure. The company chose IBMWebSphere Commerce, in part because of the flexible and efficient way in which it functions behind the scenes. With WebSphereCommerce, basically you’ve got a single Web site that handles all of the transactions. This central engine supports as many customer-facing Web stores as you like, and it’s easy to add new ones or roll out new features across brands. The platform, running on IBM Power Systems™ hardware, also has to integrate seamlessly with the company’s existing systems. The 1-800-FLOWERS.COM platform will remain in place, and most of the other brands will be migrated to the new Web Sphere Commerce-based system over the coming year. In the interim, everything needs to continue functioning transparently. To accomplish this, the service-oriented architecture solution includes IBMWebSphere Message Broker and IBMWebSphere MQ, which form an enterprise service bus that ties the legacy systems together. The initial rollout supports two of the company’s gift food brands, and took a total of only seven months with the help of IBMGlobal Business Services. 1800flowers.com went from Web 0.5 to Web2.0 in only a few months; they could not have done that with-out IBM. Knowledge transfer and lessons learned during the initial rollout will help 1-800-FLOWERS.COM to take a greater role in launching their remaining gift food brands. In this way, the company will be well prepared to launch future brand storefronts entirely on its own. IBM was chosen mostly because of the capabilities of WebSphere Commerce and the expertise of IBM Global Business Services, but Bozzo emphasizes another important consideration: IBMGlobal Financing. “Because of the uncertainty we’re seeing in the macro economy these days, making it easier to make the investment was a key decision driver for us. IBM was able to give us what we needed in that area.”

Competitive Advantage
The company deployed mobile ads through Google ads to deliver ads to customers searching from their mobile devices. 1-800-Flowers.com received over 2 million mobile impressions since the launch of mobile campaigns. This resulted in increased sales and drove traffic and incremental orders. The launch of their mobile ads boosted their CTRs and conversions. The company achieved CTRs 2-3 times higher on mobile than on desktop-based AdWords campaigns and improved customer convenience. They were able to achieve this by launching a mobile site to enable customers to order flowers on the go. And lastly, they ‘scooped the competition’. While competitors like FTD and Teleflora were investigating mobile, 1-800-Flowers.com was already there.
1-800-Flowers.com also deployed a platform from Bazaarvoice in time for Mother’s Day that supports customer generated ratings, stories, reviews and a live chat application from LivePerson Inc.
FTD, their main competitor has available technology mainly FTD Mercury Technology which consists of FTD Mercury, Mercury Connect, and Mercury Direct which provides FTD members the ability to update their electronic florist directory twice each month, gaining access to the most up-to-date list of florist to fill orders.
1-800-Flowers.com constant strive to keep ahead specially related to its Information Technology systems initiatives has helped them maintain their competitive advantage.
Future Growth
The company plans to migrate to a Linux® operating system environment and revamp its retail store infrastructure. Currently, the company transmits data from retail stores to its transaction centers via FTP. But 1-800-Flowers plans to build a service-oriented architecture and are evaluating Progress Sonic ESB® for application integration based on the success the company has experienced with SonicMQ.
The implementation of WebSphere Commerce is a critical first step—the benefits of shared services that it offers will trickle down throughout the organization over time and enable new ways of going to market. Tearing the walls down will enable to go to market more effectively. They’ll have a lot more shared information about buying patterns and customer profiles and that will allow them to cross-sell much better. The most significant impact of the platform, however, will be in the competitiveness it brings to 1-800-FLOWERS.COM by allowing the company to leverage best practices across the entire business. The platform will enable the individual brands to do things they would never have been able to cost-justify before. It’s going to give unprecedented agility. They will be able to re-merchandise their Web stores on the fly in response to competitive offers. That will make much more relevant to the customer, which is critical. Customer expectations continue to ratchet up, and this new platform is positioned to meet them going forward. They’ll have an immediacy and responsiveness that will give us a real competitive advantage.”

References

"About us" page from the 1800flowers.com, [online]. Available: http://www.1800flowers.com/template.do?id=template8&page=9001

internetretailer.com, [online]. Available: http://www.internetretailer.com/2009/04/14/at-1-800-flowers-com-new-technology-blossoms-in-time-for-mother Management Information Systems
Effy Oz, Cengage Learning, 2008. Page:308

Bloomnet Information, [online]. Available: http://seekingalpha.com/article/15445-1-800-flowers-comments-on-bloomnet Smarter Retailers are redefining the customer journey, [online]. Available: http://customercentriccommerce.blogspot.com/2009/11/smarter-retailers-are-redefining.html Progress Software Customer, [online]. Available: http://web.progress.com/en/sonic/customers.html VPI [online]. Retrieved from http://www.vpi-corp.com/case_fullstory.asp?case_id=78

Google MobileAds page. Retrieved from http://static.googleusercontent.com/external_content/untrusted_dlcp/www.google.com/en/us/ads/mobile/pdfs/casestudies/flowers.pdf Bazaarvoice page. Retrieved from
http://www.bazaarvoice.com/about/press-room/1-800-flowerscom-teams-bazaarvoice-celebrate-millions-moms