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Nov 1, 2011
Although the economy continues to be sluggish, innovative gift and novelty dealers are finding ways to engage shoppers and bring some fun to a marketplace that desperately needs a few smiles. "People don't have a problem spending a couple dollars to have a little fun," says Jackie O'Rourke Pope, sales manager at Kalan LP. And while fun products are inspiring consumers to grin, that's not the only trend that has merchants smiling. Wholesalers are reporting that licensed merchandise and products offered at lower price points are also a bright spot in the current economy.
According to Pope, perseverance is key when marketing these products. "Business has been a little soft, but we keep plugging away." Pope herself has been plugging away for 27 years, and Kalan LP has been active for 40 years. "I would not say that we are recession-proof, because nothing is truly recession-proof any more," Pope says, "but shoppers will spend money on entertainment, and we specialize in humor." Kalan is also a success because it keeps retail prices low, in the $5 range and lower, and Kalan is always introducing new merchandise. "We have to continually make new products, as well as new styles within each line," says Pope. "We review our lines every eight to 12 weeks. We want everything to be fresh, and nothing is allowed to get stale."
In addition to Kalan's team of inside sales reps, the Internet is increasingly important to the company as a sales tool. "We just launched a new website that is making it easier to order from us online," says Pope. "We completely reconstructed our site to make it more user-friendly. For example, now customers can see the artwork for every product, artwork that helps sell the product." Kalan uses email to keep in touch with customers, and Facebook to solicit funny ideas for new items from artists and writers outside the company. Those items run the gamut, including buttons, tin signs, shot glasses, plastic drinking cups, and lanyards. "Rubber band bracelets are huge," Pope adds, also mentioning feathers and animal prints as popular design elements. Kalan is considering a custom item program to allow personalization in bulk.
According to Luis Arce, president of Jacob's Paradise, Inc., fun and games are a winning combination when selling gifts and novelties. "Our top sellers are the drinking games. We have a roulette game, tic tac toe game, a spinner game, and they all come with shot glasses," he says. About 50 percent of the trade at Jacob's Paradise comes from gifts and novelty sales, says Arce. "We're importers and distributors of incense, key chains, diversion-safe cans, and jewelry." The company is constantly on the lookout for new items. "The economy has been so bad, you have to try to keep coming up with new items all the time," he adds.
Arce sees a trend towards lower priced items and expects that successful merchants will be selling bargain priced products for a long time to come. "People don't have a lot of money, so they're looking for something they can use to entertain themselves at a low cost," he says. "That trend is going to continue. Even as the economy gets better, people are getting used to the idea that they don't have to spend as much money as they once did."
Technology is a key part of the wholesaler's success. "Our website is easy to navigate, so long as buyers register with their email. They can order right online." Jacob's Paradise is also focused on logistical technology. "We ship about 98 percent of our orders, which is unusual in the industry," Arce says. "Other companies ship 60 to 80 percent, if that much." He sees this as part of the company's efforts to have good inventory control. "Being out of stock for an item is a big turn-off to a buyer," Arce adds.
Humor was the inspiration for Backgate Design's entry into the novelty and gift market. "My dad invented Flair Hair visors as a joke, and people started wanting them," says Jennifer Delaney, vice president of business development at Backgate Designs. Flair Hair hat products have universal appeal, in part because they are affordable as well as amusing. "We sell all over the place," she says. "It's lower cost items that bring laughter and fun that customers want. People want things that make them feel better in a bad economy," Delaney emphasizes.
Being able to see the product really makes the sale, and retailers who want to take a good look can do so online at flairhair.com. "The web is a pretty big part of our business," says Delaney. Online, consumers can buy the product directly from Backgate Designs, and as a consequence, the company exercises tight control over allowing other ecommerce retailers to sell the item on the Internet. For now, Backgate is satisfied with its current ecommerce partners. "We do not accept new online customers," says Delaney, referring to merchants selling Flair Hair on the web, "because there are so many out there. We do have a very close relationship with a number of ecommerce merchants, but because we are also online, it just doesn't make sense to solicit more ecommerce customers." Instead, the company seeks brick and mortar locations to carry the product, and for those customers it offers varieties that cannot be found online. "Our website is directly to the customer, and we don't wholesale at all online. That's a totally different part of our business. Retailers have to get in touch with us directly," Delaney says.
Another niche that gift and souvenir suppliers are building is licensed merchandise, especially college and sports themed items. That's the strategy that Prizes! has followed. "We're a licensed sport souvenir and novelty company, in business 25 years, with a unique line of items. Our line is not broad, but all our items are very good sellers," says company owner, Tom Portale. "Business has been a little slow, but now that the NFL strike is over, sales are really picking up." Prizes! sells licensed merchandise for four major sports and more than 100 colleges, focusing on furry and vinyl plush toys. The company's biggest seller currently is a new teddy bear product.
Portale looks to value pricing to keep demand up in a sluggish retail environment. There is, however, continued demand for licensed souvenirs and novelties, especially for consumers' favorite teams. "In a weakened economy such as we have now, I think demand is higher for the low-priced items. Everybody likes souvenirs for their favorite teams, but not everybody can afford the very expensive items these days," he notes. Portale also acknowledges the growing ecommerce marketplace. "The number of consumers and buyers online continues to grow very dramatically," he says. "We don't offer ecommerce online ourselves, but using our website as an informational tool is a critical part of our business. We display all the items we stock for every specific team." The quality and breadth of the photography on the site is a strong selling point.
At Natural Gems, Co., Yvonne Richman agrees that the wholesale trade matters. "A lot of our business is in novelties," she says. "We started our business with small stone carvings of animals and figurines. Then we branched out into jewelry. We've been lucky, and our trade show booths are always busy." But the company has made its own luck with new lines and new products. "We're introducing some new crystal lines of jewelry, and we've got a new rhinestone crystal line of beads, earrings, and bracelets. These new bracelets were a big hit at our most recent show, and we are now pretty much sold out," Richman says. "Crystal has been in for a while, but now it is very popular and we're developing new products in that line. We're also doing very well with large-hole beads that people can use to make their own jewelry." Even in fashion jewelry, the products that move best in this economy are those at lower price points. Most of Natural Gems' items are very reasonably priced, and that's one of the reasons for their growing business.
Natural Gems is also making strides towards building up its ecommerce capabilities. According to Gil Castillo, the company's tech guru, about 30 percent of business now comes through the ecommerce website, and with the new improvements, that will rise. The site is getting a new back end and shopping cart. Castillo explains that the current ecommerce back end has several problems. For example, its search function is slow. "The new site has an improved search function that can pick up on misspellings, and the new shopping cart is more customer friendly," he adds. There will also be a complete revamp to emphasize clean and functional design. "We're focusing on SEO as well, with SEO friendly URLs," says Castillo. The revamp should be complete by the end of the year.
While shoppers remain sensitive to the economy, they are still willing to make purchases for items that entertain and are affordable. Wholesalers need to be proactive and evolve to survive in a sluggish economic climate, and can learn from those who have found a successful niche in the industry.
For more information:
97 S. Union Ave.
Lansdowne, PA 19050
Toll Free: 800-345-8138
Jacob's Paradise Inc.
1576 W San Bernardino Road
Covina, CA 91722
Toll Free: 800-650-6051
16550 Railroad Ave., Ste. B
Morgan Hill, CA 95037
Toll Free: 866-999-3220
Natural Gems Co.
13645 Alton Parkway, Unit A
Irvine, CA 92618
Huntington Beach, CA 92649-1074
Toll Free: 800-992-2338
Topic: Product Trends
Related Articles: Novelties
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