By Megan Graham
1-800-Flowers.com is weaning itself off buying clicks.
The Jericho, N.Y.-based floral-and-gift delivery company said this month that it is changing its marketing strategy, working to strengthen its brand cachet with consumers and reducing a heavy focus on driving transactions.
"Last year, our marketing efforts were heavily focused on bottom-of-the-funnel activities, primarily focused on driving transactions, and we did not have the systems or infrastructure in place to effectively drive customer retention," Chief Executive Adolfo Villagomez said during an investor call on May 7. "The most important asset we have, it's our brand. And unfortunately, we hadn't invested in the brand for a while. We are reversing that."
Marketers of all kinds attempt to balance "bottom-of-the-funnel" activities -- like promotions or retargeted ads to get consumers to make a relatively immediate purchase -- with so-called "upper-funnel" campaigns to build brands and generate consumer goodwill at a higher level.
Pressure to show the return on every advertising dollar often leads marketing departments to embrace the lower funnel with tools like cost-per-click keyword search ads. But many also eventually realize they neglected their brands in the process.
Bath & Body Works last year said it would increase its emphasis on brand marketing, for example, after an overreliance on discounts and promotions to drive sales eroded its brand loyalty and price integrity.
1-800-Flowers will try to bolster its brand partly by investing more in influencer marketing and platforms such as Instagram and TikTok, and partly by trying to improve the consumer experience with moves like cutting delivery fees. The company said it has also been infusing AI into its sorting and search rankings on its website to help consumers find the right product faster, along with testing AI in hopes of improving customer service.
A highly transactional approach to keyword advertising, meanwhile, is under revision.
"We were buying transactions for $40 and making $20 margin on each transaction, then you would say, well, that's great because we are acquiring a customer," he said. "That's true if you retain the customer. But if you don't retain them, then you are just wasting dollars. So we're working on both lowering our customer acquisition cost and improving our retention."
A stronger brand also makes lower-funnel ads more efficient, Villagomez suggested, citing aggressive online competition in the floral category.
"If you only focus on acquiring and buying clicks, your customer acquisition cost becomes significantly higher," he said. "What we are doing now is leveraging the brand awareness....The bottom-of-the-funnel transactions do not build a brand. They just lead to transactions. Middle- and top-of-funnel build the brand, build awareness so that you're in the subconscious of the customer and eventually, when they have a need, they think about you."
Villagomez warned analysts on the call, though, that the shift could take time to pay off.
"Sometimes this top-of-the-funnel, you will invest now and you won't see the benefits until next month or next quarter," Villagomez said.
Revenue at 1-800-Flowers declined 11.6% in the three months ending March 29, mostly as a result of moves to improve marketing effectiveness and profitability, the company said before the earnings call. It posted a net loss of $100.1 million.
1-800-Flowers held about 9% market share among online flower shops in the U.S. as of February, after declining steadily from 14.3% in 2022, according to market researcher IBISWorld.
Online flower shops are facing a rapid influx of new challengers, IBISWorld said.
"This heightened competition has pressured online florists to restrain prices and speed up delivery, driving down profit for major companies like 1-800-Flowers.com and FTD Companies," analyst Matthew Buchko wrote in a February report. "The competitive landscape is intensifying as consumers easily compare prices and reviews, forcing florists to continually innovate to retain market share."
Write to Megan Graham at megan.graham@wsj.com
(END) Dow Jones Newswires
May 22, 2026 06:00 ET (10:00 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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