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Aug 1, 2009
by Kevin Zimmerman
Even the National Retail Federation (NRF), which usually can be relied upon for a sunnier outlook, reported that the 2008 holiday season saw sales decline by 2.8 percent. The first such decline since the NRF began tracking data in 1995. Reasons for the sharp drop-off regularly cited include fewer holiday shopping days in 2008, and severe winter weather's negative effect on shopping. But the real story, of course, was the growing decline in the economy, which led many stores to panic and offer such deep discounts that they ultimately hurt their own bottom line. Add in the fact that up to 50 percent of some stores' sales are usually derived from the holiday season, and that bottom line turns an even deeper shade of red.
So where are things headed for Holiday Season 2009? Perhaps somewhat surprisingly, most observers, both at the associations and the sellers themselves, are feeling pretty upbeat about the prospects, if they can hang on until then. "Last year was not so good," remarks Tom Tal, vice president at Puzzled Inc., which specializes in wooden toys. "This year so far has been okay, but the trade shows have been shrinking, and that's a problem. But we think that with the right effort we'll finish the year in a good position."
"So far, 2008 has been all right, nothing spectacular," says Mark Cohen, owner of Bongo Flashers, which offers wholesale body lights, blinky lights, flashers, and glow sticks. "We're seeing our business starting to pick up, which is not bad," he adds with a laugh. Some are taking heart from the NRF's 2009 Independence Day Consumer Intentions and Actions Survey, conducted by BIGresearch, which indicated that. Since July 4 fell on a Saturday this year, more people would be actively celebrating, with 62.6 percent (144 million people) either hosting or attending a cookout, barbecue or picnic, compared to 61.2 percent (139 million) in 2008. With those plans come added store traffic, the group said. Such news is welcomed by Cohen, who does a significant trade in American flag themed products. "We always look forward to the Fourth," he says.
Looking further ahead, the Consumer Electronics Association has indicated that Holiday 2009 expectations, while low by historical standards, will be much improved over 2008's numbers. An expected price decrease for gaming systems, Nintendo Wii and Sony's PlayStation 3, will help drive the sector's sales. Even the hard hit luxury sector is taking steps to ensure a stronger 2009, as executives at the Reuters Luxury and Retail Summit, held in June in New York, indicated that price cuts were in the works, meaning, however, that Prada bags will now be a little less unaffordable, in some cases.)
This realization that the time has come to rethink long held traditions and practices is much in evidence throughout all sectors of business. Scott Austin, president of SNAFU Designs, a wholesale supplier of greeting cards, says his company will, "probably offer retailers more discounts and specials, free shipping for a certain size order, things like that, to drum up a little more business. In the past, we haven't had to do that." Though SNAFU offers two basic lines of cards (floral and humorous), Austin says the humorous cards are by far the strongest current sellers. "I don't know if it's because the economy is bad or the world situation is so scary or what it is, but people are gravitating more toward humor and more toward our gently humorous cards, rather than the edgier ones."
Most of SNAFU's cards are priced at $1.25 each, or in six and twelve packs priced at $7.50 to $15. The company requires a $75 minimum first time order, and a $50 minimum for reorders. SNAFU also offers packages of some of its best selling cards, starting at $180 for 12 sets of a dozen cards each: The same packages are available with white wire spinner displays, priced from $135 to $1,800, depending on size. Austin says plans are also afoot to make SNAFU's website more user friendly. "It used to be really an online catalog only," he says. "For the first time last year we offered sales online, and the response has been great. Plus it saves us money from not having to send out a catalog and sample cards, with postage."
Bongo Flashers is also looking to revamp its website, according to Cohen. "It's really a full facelift," he says. "We want to add more descriptions to our items and have a faster checkout." The company's full line of flashing badges, pins, necklaces, sunglasses! Etc. cover nearly every conceivable holiday and special event, as well as various hobbies and lifestyles. In addition to Independence Day, Cohen says Bongo's busiest season traditionally runs from Halloween through Christmas. With some holiday items like a flashing snowflake pin/necklace available for individual purchase at $0.95 each, most items are available as minimum orders of 20, such as the flashing candy cane with blue bow, which starts at $30 for 20 ($1.50 each) and goes up to $1,150 for 1,000 pieces and up ($1.15 each).
Meanwhile, at Home & Hearth, which offers everything from metal decor, wall art, serving pieces, and garden items, to baskets, figurines, clocks, swags, and enamelware year-round, the holidays also usually see a spike in sales. Remaining a strong seller, per vice president Jackie Kann, is the company designed 9 inch x 20 inch, "Plush Pudgy Snowman" figure, priced at $7.12 each (for orders of 1 to 7) and $5.70 each (orders of 8 or more). "We designed him about six years ago, and we reinvent him now and again," Kann says.
She adds that Home & Hearth's line of plush mooses, ranging in price from $4.76 each for a moose in a carved birch bark canoe to $19.14 each for a 36 inch tall moose with an infant, have been particularly strong sellers of late. The store's other holiday themed merchandise includes tin standing reindeer ($7.80 each), cold-cast porcelain Holy Family statues ($8.92 each) and a Santa chalk board ($7.57 each), along with a host of ornaments and serving supplies. While no special sales or marketing deals are finalized yet, Kann says, "We'll probably go with one of our past incentives, like ordering certain items at a big discount with a minimum order." Currently Home & Hearth requires a minimum order of $150.
Puzzled Inc.'s line of 3-D wooden puzzles remain its best selling line, according to Tal. The company offers a wide variety of styles, from animals and boats to landmarks like the Sphinx and the Eiffel Tower, as well as Christmas themed Santa Claus in Sleigh and Snowman. In addition, the company offers its Royal Selection line of toys and ornaments. Tal notes that custom orders are available. "We're concentrating on getting the word out at the trade shows right now," he says, "and most of our marketing efforts are aimed at training our reps."
Trade show activity is picking up for Trippies LLC, according to president, Kevin Davis. The company, which distributes quality giftware and home décor, has been doing especially well with its line of angels. "While business has been a little light," he says, "we're feeling good about the months ahead."
That activity includes the introduction of a new line of angels, featuring plaques and photo frames under the rubric, "Wood Inspirations." The line's seven-inch angel will sell for $8.25 each, its 10 inch angel for $12.90 each, plaques for $5.90 each and photo frames for $6.90.
Also introducing a new line this year is GiftBliss Enterprises', InstantSnow, which in addition to its core product, a synthetic polymer that when water is added, creates fluffy "snow", will offer a "Snowball to Go" ornament. GiftBliss president, Michael Penna, describes it as a, "craft-type item," which the end consumer puts together, and by adding water, can create a 'snowball' effect. The product, available for shipment in September, is priced at 24 snowballs at $3.45 each, or if bought in combination with other products, $2.97 each.
Generally, Penna says, "We ship a lot more from September to November than any other time of year, but our sales go on year-round. Some retailers know our product already so well that they'll set up multiple ship dates, so they don't have everything on hand at once." In addition to poly bags, jars, and tubes of InstantSnow, the company also offers a line of greeting cards that include some of the powder, and a "Fairy's Frost" edition of its core product, which adds glitter to the basic substance.
Penna says his business has been hurting, mostly from a lack of retailers. "We have many retailers throughout the country, but we could use a lot more," he says. "In some regions last year, we had to direct folks to a handful of websites that sell our product, as there weren't any retailers near enough to them."
For more information:
Mark Cohen, owner
19140 No. 4 Lahey St.
Northridge, CA 91326
Toll Free: 866-707-5483
Michael Penna, president
19269 Mallory Cyn Road, Bldg D
Salinas, CA 93907
Toll Free: 866-363-3807
Tom Tal, vice president
5310 Derry Ave. Suite J
Agoura Hills, CA 91301
Toll Free: 888-789-3533
Jackie Kann, vice president
Home & Hearth
N112 W14600 Mequon Rd.
Germantown, WI 53022
Scott Austin, president
2500 University Avenue West Suite C10
St. Paul, MN 55114
Toll Free: 800-766-5786
Kevin Davis, president
287 Elam Road
Ray, OH 45672
Tel.: 740 884-4434
Fax: 740 884-4441
Topic: Business Strategies
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