Share this on

Inbox

By Staff -- Gifts and Dec, 1/1/2009 12:00:00 AM

All Affiliates Not Equal

This letter responds to the two-part column “Profit Partners” by contributing editor Cinda Baxter which appeared in the September and November issues of G&DA.

Dear Cinda:

We understand the points you shared, but I feel your message of caution feeds one of the cancers that impedes growth in our industry: fear of trusting one another.

Annalee Dolls has for years played a role in collectibles, Christmas/holiday, gift and home décor. Our past has seen some of the shenanigans you caution against. However, under new owner- and leadership, Annalee turned around from almost closing its doors in 2000 to a growing, profitable company. The foundation of this success has been to work in multiple channels, focusing on the needs and concerns of each. The company focused on the end consumer, and the fact that consumers today shop in many different channels, including the independent retailer. We put together an integrated strategy that allowed us to become a true partner with retailers.

First, it was clear that each channel (independents, off-price, department stores and direct-to-consumer) had specific needs. We found that channel enemies can actually be symbiotic. Annalee sells to full-priced independent retailers. We also sell to off-price retailers and department stores. The independents are offered a guaranteed sales program. We send product to them in September, they retail the product until Christmas, offer an after-Christmas sale, and return what is left, paying only for what they sold. This allows independents to have full shelves with no risk of residual inventory, which is a killer for small stores.

We also sell to off-price retailers, but only styles from past years. Exposing the brand at thousands of off-price locations gives new customers a glimpse of the line. Because the off-price store does not have the selection and service advantages of the independent, this new customer may shop the independent for their next Annalee purchase. This may not happen every time, but controlled exposure helps build the brand and helps independents sell more. On the flip side, the independent establishes the full line, which makes the treasures more desirable in an off-price channel.

Annalee also has a retail channel which includes mail order, website and factory stores selling direct to the consumer. To help integrate these channels with the independent retailer, in 2009 we offer an innovative trust-building affiliate program. Even though programs of this type are much maligned, we are excited that the design of our program is simple and profitable in both the short and long term. Qualifying stores can use all our direct-to-consumer marketing tools. The retailer will make a percentage from all sales to their customers regardless of which direct-to-consumer channel they buy from. The percentage could be more than the net they realize from sales made in their brick and mortar locations. Annalee will continue to pay the retailer on all sales from all channels as long as the consumer buys from a direct Annalee channel. Additionally, we will advertise the brick and mortar location of the affiliate who supplied the consumer name, will mail to our in-house list advising them that the product is available at the affiliate location, and the retailer website will be linked and supported.

There was a feeling from your article that vendors are out to take advantage of retailers and want to steal their business. Our message is that we want to truly partner with good retailers and not just pay lip service to a relationship. Since we started offering these programs, we have met with both compliments and skepticism. However, our business and bottom line have more than doubled, our account lists rival our heyday and we like to believe our retailer partners have found us a partner they can trust.

Sincerely,

Bob Watson, Sr. Executive VP and Dave Pelletier, CEO. Annalee Dolls Inc.

Independents Will Win Out, Says Gift Box

Dear Editor,

The last several years have been difficult for business and we think you would agree that so far, 2008 “takes the cake.” But, during these less-than-optimum business times, our core customers, the small independent, family-owned gift shops, have done pretty well. Of course, some have had to close their doors like many of the big box stores, but the “Mom & Pop's” of the world have been able to weather the storm because they have some important things in their favor.

These are the local merchants that, in many instances, not only know their customers by name but also know their customers' taste in gifts and cater to them individually. These are businesses with “hands on” management/ownership that can adjust quickly to the times. They have become icons in their communities and provide a comfortable shopping environment along with service on a more personal level.

This segment of the retail population fully understands that their strength is not in their ability to buy at the lowest cost, but to provide attentive service at the highest level. Their packaging speaks volumes about the pride they take in their business, their products and the lasting impression they leave with their customer and the ultimate recipient of the purchased gift. By using coordinated packaging, these retailers have been able to brand themselves in their markets, offer a “gift“ presentation that rivals the Department Stores and create a positive and lasting image of their establishments.

We know the retail environment will be difficult for some time to come. We are proud that we have historically had the independent giftware retailer as our core customer base, and we believe that the future will prove the strength of their commitment to personal service wins out!

Warm regards,

Clyde Brownstone, President, Gift Box Corp. of America

Share this on

Talkback

We would love your feedback!

Tech That Connects

Dec 1, 2009

The Mall in Your Pocket

Jan 13, 2011

Gifted Retailer Roundtable

Mar 31, 2009

Face Forward

Sep 1, 2009

Industry Forecast

Dec 1, 2005

Also by this author

»MORE

Featured Company

FurnitureCore.com

FurnitureCore.com is a dynamic web application aimed at the furniture industry. Retailers and manufacturers alike will find our deep reserve of tools to be exactly what their furniture business needs.www.furniturecore.com... more