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The Price is Right – or is it? 8 Pricing Strategies that Work (Sometimes?!) Page 12

Retailer Corner - page 4

4 Lessons I Learned from Bad Experiences Robin’s Picks - pages 10-11

Ask The Experts - page 14

Retailers Reveal their Most Successful Promotions Also inside

Meet the staff- page 6

Visit our Showroom: AmericasMart Bldg. 2 — #1305

SUMMER

10

Top Reorder Items and Hot Finds for Fall


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Robin’s Retailer Corner

4 Lessons I Learned from Bad Experiences

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he good news is that 2010 is not 2009 – although the economy is still fragile. Consumer shopping habits have changed and cash is still tight. Vendors have experienced a labor crunch in southern China, increased costs and container shortages in freight yards all over Asia. Yet despite all that, at Southeast Marketing we have experienced superior product development, better administrative support, improved shipping accuracy and enhanced communication from most of our vendors. So what’s going on? It seems to me that the strong got stronger. A hefty dose of introspection, belt tightening and good old-fashioned elbow grease resulted in more efficient and effective businesses. Like the stores we service, we are thinking harder about what we do, why we do it and how to best serve our customers. Sometimes good things come out of bad experiences. Here’s what I learned: Lesson 1: It’s not death. A dear friend, a retired psychiatric nurse by training, recently helped out with some temp work at our office. One day she said to me, “I love the gift business. When I was in the medical profession an emergency in the psych ward often was a matter of life or death. Here it’s about a shipment of napkins. Certainly it is urgent to the retail store that wants to serve their consumer, but “it’s not death.” This statement has become a mantra for me. On April 2 my mother passed away. For 18 months I had watched her fight cancer, pushing herself to stay active. Pragmatic to the end, she told me “Let me do what I can do for as long as possible. When I stop doing I’ll start dying.” Now, when I feel overwhelmed with too much to do, I think of my mom, am thankful for my life, and try to honor her with my industry and efforts. Rather than seeing problems as a source of stress, I think of them as a puzzle to solve and approach them with passion and commitment. Thinking “it’s not death” has made the challenges of work less nerve-racking. Like a dog with a bone to chew, I am thankful and happy to be engaged in life. Work is a celebration of health, intelligence and capacity.

fire. The rehabilitation of our showroom is all behind us now. But the lesson that relationships matter is with us forever. Tammi, our showroom manager, has been working in the AmericasMart building for over a decade now, bringing cookies to the security lady and the occasional Burts Bees lip balm to the Fed Ex staff. When people in the building heard about the disaster they flocked to help. Tammi told me, “There was little anyone could do and going to the showroom each day and seeing the ruin was revolting. What got me through it was the moral support from the people in the building. It was invaluable to know people cared.” For me, the entire experience was put in perspective by my mother’s failing health. So when Tammi called to tell me about the fire, she was relieved that I actually laughed (once I knew no one was hurt). Of course I was thinking “It’s just stuff. It’s not death.” Lesson 3: Less is more. Doing a few things well is more important than doing a lot of things in a mediocre fashion. For Southeast Marketing that means more concentrated responsibilities for each rep so we can deliver more frequent and thorough service to our retail clients. For retailers this manifests itself in buying more from fewer reps and vendors, and relying more deeply on the partnerships between these three parties. For consumers, the less is more is showing up in their buying habits. If they only have $20 to spend they are thinking hard about how to spend it. A Duke University professor found that while customers were more likely to stop at a display with a wide selection, too many choices made those customers less likely to buy. Lesson 4: Get a dog. In the middle of this entire trauma we brought a puppy into our household. I certainly wasn’t looking for another responsibility, but all I will say is I LOVE MY PUPPY (a goldendoodle named Mobley). There is nothing like the wag of a tail and the shameless exuberance of a dog’s greeting to make you feel thankful and alive.

Lesson 2: Relationships matter. The weekend after the

January 2010 show we had a flood in our showroom (don’t ask!). Goodbye carpet, wood floor, walls, computers. Hello, State Farm. Just when we thought the worst was over we had a 4

SOUTHEAST MARKETING • summer 2010

Mobley

Robin


Meet the Staff

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outheast Marketing is all about the people. Each issue we feature some of the individuals whose hard work and wonderful spirit have helped to make Southeast Marketing a standout company. We have chosen the candidates by seniority. This is the fifth issue of our magazine, and we proudly highlight five associates who have been with us six to seven years! 1 Elizabeth GRIGGS,

joined March 2004 What turns you on? Spending time with friends and family, traveling, fresh flowers. Where’s your favorite place to be? The beach or Disney World. If you were a superhero, what would your talent be? Being four places at once. What’s the best part of your job? The people. I like my co-workers, my vendors, and my retail clients. Seeing different people every day. Title of my autobiography: All I Know, I Learned While Servicing the Card Spinners at Cracker Barrel: A Lesson in Working Together, Keeping People Happy and Drinking Sweet Tea. What is the most surprising thing about yourself that few people would know or guess? I graduated from college with a degree in art history and I love listening to Howard Stern. 2 Suzanne HANSON,

joined

March 2004 6

SOUTHEAST MARKETING • summer 2010

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What turns you on? Family, friends and an organized life. Where’s your favorite place to be? With my granddaughter Chloe. If you were a superhero, what would your talent be? Leaping tall buildings in a single bound would make me more time efficient. What would your autobiography be called? SuSu’s Story. What’s the best part of your job? I really don’t feel like I go to work each day, but go and visit with my friends. What is the most surprising thing about yourself that few people would know or guess? I owned and rode a motorcycle. 3 Kim PAQUETTE, joined December 2004 What turns you on? Traveling with my husband. Where’s your favorite place to be? France. If you were a superhero, what would your talent be? Flying. What would your autobiography be called? A Series of Fortunate Events. What’s the best part of your job? I love speaking to different people everyday. What is the most surprising thing about yourself that few people would know or guess? I am fluent in French, and born in Montreal, Canada. 4 Connie SYKES,

2003

joined December

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What turns you on? When things work out as planned. Where’s your favorite place to be? Anywhere that I can be on vacation with my family. If you were a superhero, what would your talent be? Reading minds. What would your autobiography be called? Building Wings. What’s the best part of your job? The flexibility because it allows me to work full time and still be a full-time mom; and the camaraderie. What is the most surprising thing about yourself that few people would know or guess? In my 20s, I sang with Sidetrack and Dixie Rose in the Mississippi Delta. Dixie Rose once opened for the Platters. Now I just sing for fun, crazy requests, weddings, and family get-togethers. 5 Vicki WALSH,

joined March 2004 What turns you on? Seeing my children happy, thriving and ambitious. Where’s your favorite place to be? The beach. If you were a superhero, what would your talent be? Taking away the worry in people’s lives. What would your autobiography be called? Are We Having Fun Yet? What’s the best part of your job? The flexibility. What is the most surprising thing about yourself that few people would know or guess? I had heart surgery four years ago.


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Robin’s Picks

TOP REORDER Items DCI – Décor Craft Inc.

From the inventor of I am Not a Paper Cup, Graphic Eco Cups started selling the minute they hit the shelf. DCI has lots more planned for fall with some spectacular holiday patterns. Reuse, reduce and recycle has gone mainstream when done right. This whimsical, functional and high design eco product has fantastic consumer appeal. $4.50 ea. — SRP $9.99.

Viva Beads

This jewelry is hot! Fabulous color palette, easy and comfortable to wear, great-looking displays. The chunky bracelets are the top reorder piece by units, but the broader the assortment, the better the sales. Like Vera Bradley, Viva is a brand; it generates repeat business, word-of-mouth referrals and supports higher retails. Wholesale prices range from $2.95 to $34 ea.

DM Merchandising

Gotta Do Notepad reorders like crazy. Build your impulse business with DM Merchandising’s Celebration line. Everything is 85 cents. Product supports $3.95 retail with ease! Create a $3.95 section in your store, keep rotating out the inventory and watch the fun. Consumers respond to single price-point displays. Excellent margins. Makes your store fun to shop.

DM Merchandising

Crystal princess necklace. Sterling silver finish, 16” chain with 2” extender. Keepsake crown gift box. $3.75 ea. SRP $9.99. Sell through is amazing!

Spoontique

Glass beer mugs with funny sayings and a retro feel. They started shipping end of first quarter and the reorders started almost immediately. Functional, fun and well priced. Free counter display. $4.50 ea. — SRP $9.99.

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SOUTHEAST MARKETING • summer 2010

Jumpin Bananas

This is the second time I have featured the laughing rolling animals, but they just keep selling! To come up with top reorder items I run a line item sales report off our computer. This is science, not opinion. There is no denying this product is a winner. If the retailer can stand the laughter and keep the darn thing turned on all the time, they will be laughing all the way to the bank. $9.50 ea. — SRP $19.95.


Robin’s Picks Malden

Ranked the No. 1 frame line for five years in a row by GiftBeat. New collection is Girl’s Night Out to be released at market in July. Same great prices and quality that Malden always delivers. Retails for $12.99 to $16.99.

hot finds for Fall

Westland

Stores merchandise Westland’s hand painted glassware side by side with Santa Barbara’s Lolita, which retails for $26.95 to $28.95. Not every consumer wants to spend that much money on a single glass. Westland offers a great alternative at $16.95 to $18.95 retail. New for fall: Girls Night Out, Birthday Girl, Peace and Love themed glasses and more.

DCI - Décor Craft Inc.

The EcoCup on Ice to Go is a double-walled acrylic cup with screw-on lid and straw. Standing 9” tall, it is 1” taller than Tervis’ big T, which retails for $16.99 ea. DCI’s EcoCup on Ice $3.75 ea.! SRP $9.99.

Lady Jayne

Notepads with signs come in six charming designs. They measure 5” x 8” (50 sheets) and come with an “inspired” wood sign with holiday theme for extra value. Hang on a doorknob, bulletin board, wall or use as a package tie-on for an added touch! $3.50 ea.

Michel Design Works 

Vanity trays are the newest addition to Michel Designs Works’ beautiful collection of handmade wooden trays (their top selling category for three years). Perfect size for vanity table or powder room. $9.50 ea. SRP $19.95 — $24.95. www.southeastmarketing.com • 800-875-1155

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The Price is Right

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he idea for this article was inspired by Barry Braverman, owner of Montville Pharmacy in New Jersey. We were chatting in my showroom and I posed the question “Is keystone dead?” Our knee-jerk answer was “yes,” but as we talked more about pricing strategies the real answer got more complicated and ambiguous. No independent gift retailer can succeed on just keystone, which is the old pricing formula of taking wholesale price before freight and any other loads and doubling it. Yet for some products at certain times this might be the right equation. In today’s market, approaching pricing with creativity and flexibility, trying different approaches and finding new ways to preserve margin is something every retailer needs to consider.

Strategy 12

SOUTHEAST MARKETING • summer 2010

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rise at a faster rate than margins, net profit percentages are in decline. Retailers have to make up the difference by increased volume with some items and by increasing the margin with others. Braverman said: “In my store, if the product is well known, we price it as competition dictates. If the product is a “blind item” or an unusual find, we price it on perceived value.  We have slowly moved our product mix to “impulse fashion” (jewelry, bags, scarves, shoes, eyewear) that allows a 2.5 to a 3.0 multiple.  We have to be creative in both our buying, product mix and pricing to be successful today.”   Try different pricing strategies. There is the sweet spot for most products where they will retail at a higher velocity and maximize turn and profit.  How do you find it? Experiment. Don’t be rigid when it comes to pricing. Try 2 for $20 and 1 for $12. Pricing strategies are based on experience, business philosophy and, most important, listening to your consumer. As Rosanne Brown, owner of Venice Stationers

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Use different margins on different product. Lilli Hurst, owner of La Boutique in Poplar Bluff, Mo., still uses keystone some of the time because “you need to go for volume and turns.” She also looks for products, like those from DM Merchandising, that are candidates for a more-than keystone markup. “It is critical to be savvier about shopping for product that will support a higher margin and to negotiate the best terms, freight options and discounts when buying. Sometimes that means branching out and finding new resources for similar products,” she said. “At La Boutique, we generally price on perceived value theory. If I can’t get very close to keystone or better, I don’t buy it.” Claire Denham is a buyer for 15 Hallmark stores in NC. She works to elevate her margins by leveraging bulk discounts with vendors. For Braverman, “the only department in our retail store that makes a 50% margin or above is our gift department. We face a lot of competition in the drugstore trade, so many items are priced using a 40 percent markup.” With expenses continuing to

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in Venice, Fla., points out: “the consumer is the ultimate arbitrator of retail price.” It is better to get rid of a “loser,” recoup your investment, clear up shelf space and move on.  If you bring in a great product and it is not selling at $14.95, re-evaluate the price, the location, the signage and how it is merchandised.  Consider two for $24.95,   buy one and get 2nd at 50% off, or calling it a super special for $9.95. Another pricing strategy is to add value. We have a UPS store in Atlanta that blows through Avanti everyday cards, but wasn’t turning seasonal cards. So before the holiday they put up a sign that said “buy a card and receive free postage.” Suddenly their seasonal cards sales doubled. Overall store sales increased too. Word got around. It cost the store 44 cents a card, but it was well worth it for the good will and incremental sales it generated. Another store put a “Card of the Week” sign on top of its Avanti card rack and picked a different card each week to go into the slot. Sales on that single card quadrupled.


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Buy for the sale table and keep it fresh. Always have some value buys in the store for the valuedriven consumer. Many retailers use the sale table to liquidate slow-selling merchandise, but keep an eye out for products with decent margins that could breathe new life into that area of your store. Hurst says the sale table can be constantly “fed” with the lastof collections from picked over merchandise, but she takes it a step further. “I have been known to buy closeouts with the idea of marking it up and marking it down immediately to show a value at a discounted price,” she said. “We’re passing it on as  a special, but making keystone, if possible.”

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Realize the difference between volume and profit – and carry higher ticket items, too. If you buy something for $5 and sell it for $10 and it sells twice as fast as the one for $10, don’t stop buying the $10 item. You are making the same amount of profit, but you need both to keep your dollars per square feet on target. A small store with a small staff like La Boutique needs to keep a tight rein on volume, which is generally labor intensive. “We have to be aware of the investment the inventory absorbs; the more inventory the more you have to store, uncrate, tag, display and clean,” Hurst says. “Some of the profit you were hoping to reap from a lower margin, but higher volume item can easily be eaten up in payroll. It is important to figure that in the equation.”

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Signage adds value! Use humor to call out a story. A NC retailer successfully touted DCI’s extra large wine glass with a sign that said “If the doctor says one glass a day ... Here’s your answer!”

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Upbeat sells. Find the fun! Make a sign that says “Things a woman can’t live without for under $20.” How about “You’ve got to be kidding! It costs what?! “ – or  “Sometimes you are worth a little bit more! Hand-crafted jewelry that is not cheap, but lovely.” When the customer comes in, tell them: “We run a special every day. Today may be your lucky day. If your

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Single price points work. There is magic to the single price point concept; witness the Bijoux Terner stores in the airport where everything is $10. When other airport stores are empty, Bijoux Terner is crowded. It’s simple to do a $5 table or a $10 table. Let shoppers enjoy the thrill of the hunt by picking through a variety of product all the same price. It is a different way to merchandise, but mixing it up keeps the shopping experience fresh and fun, and a little unexpected. David Marks, owner of DM Merchandising, is a big advocate of single price points. Fifteen years ago he launched Celebration, an all-season product line where everything is 85 cents. He encourages retailers to price the same way. Some tricks? “Promote one price from a distance. You want the consumer to be able to see the sign from across the store that says “everything $9.95.” Consistency also is important. Once customers know there’s a $5 section in the store, it’s the storekeeper’s responsibility to keep it updated and fresh, Marks said.

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Offer a variety of price points for similar items in your store. Pricing is much more elastic then many retailers imagine. You can sell greeting cards for as low as $1.99 and as high as $7.99 depending on the look, texture of the paper and the artwork. This applies to many products. Consumers are being more selective in what they buy and are willing to pay more to get exactly what they want. Romancing a product with merchandising can go a long way toward making the price elastic. It is as important as the price tag. Denham of Cary R&D Enterprises said accessory and fashion items are well suited to varying price points.“You need something for the customer who knows it’s costume, but don’t assume everyone wants to wear a $10 bracelet. Some might be willing to pay $30 or more.”

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license expires in the month of January, you can buy anything in the store and get the second one for half price.” Be creative and reflect the personality in your store with your pricing strategy. Make it memorable and original.

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 Bundle products together to create value. Great merchandising can boost exposure to products, showcasing them in a way customers never imagined possible. This is always the best way to enhance perceived value. Hurst of La Boutique said her store strives to be “more creative in our merchandising to engage the customer in an experience away from a price-conscious attitude.” Instead of lining up products like tin soldiers, Braverman says a 4-foot section of the store could feature four to eight different vendors to “make a statement” and allow for cross merchandising. Selling stories behind the product all add value to the shopping experience and hence the price of the product itself.

Fashion items such as Viva Beads are well suited to varying price points. Don’t assume everyone wants to wear a $10 bracelet. Some might be willing to pay $30 or more.

www.southeastmarketing.com • 800-875-1155

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Ask the Experts

O Robin

ne of the changes I observed this year is that retailers are becoming much more sophisticated and creative in how they buy and promote. The shopping experience has changed. Consumers expect value; emotional, aesthetic and financial. They want shopping to be memorable and fun. Promotions may or may not be focused on price. The key to advancing store sales is finding creative ways to encourage and help your customers make buying decisions. With that in mind I called four retailers and asked them this question:

Promote, promote, promote seems to be the mantra for retail after the recession of 2009. What promotion have you tried in the last year that was a great success? I think there is a fine line to walk when it comes to promotions. The trick is to do enough without

Linda Wolbert Sign of the Dolphin

being obnoxious, to make it relevant, make it memorable and make it fun. If you over promote you run the risk of annoying your customer to the point that they tune out. If you always are offering sales, you run the risk of your customers just waiting for the next one or, even worse, expecting you to always give them a discount. We prefer to value add. We offer a gift with minimum purchase or a gift certificate that can be used for another purchase at a later date. The benefit of the gift certificate is that it can make a big splash and only cost you half or even less depending on your margins. For example, a store can offer a $20 gift certificate with a specified purchase of $50 or more. To the customer it looks like a big gift, but it’s only costing you $10 or less, again depending on margins. The important part is that you don’t allow the gift certificate to be used at the same time. We always future date them by at least a week. Linda Wolbert has owned Sign of the Dolphin in Madeira Beach, Fla., for 15 years.

Our No. 1 focus this year has been celebrating Hallmark’s 100th birthday. A non-Hallmark retailer

Claire Denham Cary R&D Enterprises

could create a similar event celebrating some other landmark day. We have asked each of our 15 stores to host a 100th birthday party on a Saturday of their choosing. We gave them a few ideas but let them design and execute the promotion. Because they took ownership of the event it truly blossomed. Before the event (about two weeks out) we used bag stuffers inviting the customer to come back for the party. We also did an e-mail blast to our customer list. There were prizes for the kids and the 100th customer making a purchase. We also gave gift certificates to customers who spent $100 or more. A greeter gave other customers a coupon for $2 off a $10 purchase. Sales increased substantially in each store on the day of the party. However, the most successful part of the promotion was how the employees worked together as a team as they became engaged in creating and selling the event. This emphasis on teambuilding and active selling generated higher store sales the day of the event and beyond.   Claire Denham has been buyer for Cary R&D Enterprises, a chain of 15 Gold Crown Hallmarks, for 20 years.

(continued on page 16) 14

SOUTHEAST MARKETING • summer 2010


Ask the Experts

Brenda Counts Counts’ Hallmark

Promoting your business has to be more streamlined, cost effective and you just have to get more “bang for your buck.” The most effective promotion that we’ve used is the “monthly feature table.” A round table is prominently displayed with signs that announce “Just for June” or “Fabulous for February.” This table has a new “must have” every month. It may be a “two-for” one month or a “BOGO” (buy one get one free) the next month, or just a “can’t do without” price the next month. To do this effectively you need to partner with your reps and vendors. Tell them that you are looking for an item that you can promote at a promotional price. Buy additional product from the vendor that coordinates with the promotional product for multiple sales. Reps and vendors are very willing to get their goods displayed in this spotlight area of your store and customers will be anxious to return each month to see what you will be featuring. Brenda Counts is the owner of 11 Counts’ Hallmark stores in Virginia.

Tim Barnett Barnett’s Hallmark

The most effective promotion we’re running is our Birthday Card offer to our Crown Rewards’ customers. (Crown Rewards is our Hallmark Customer Loyalty program.) While we certainly value all of our customers, our Crown Rewards’ members are our most loyal. We send a customized Hallmark birthday card to our most active Crown Rewards’ members and enclose a certificate good for 20% off their total regular priced purchase one time during their birth month. In 2009 we saw a response rate of 25.4% with an individual average transaction of $22.93. This program can be executed by any retailer. The concept is the same; identify your repeat loyal customers, ask them for their birthday so they can participate in a Birth Month Reward program, and keep the traffic flowing. Tim Barnett and his family own and operate five Hallmark Gold Crown stores in Richmond, Va.

Fabulous Foils

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Tower of Notes

TM

Visit us at:

Happy Holidays

Pretty Paper

Southeast Marketing Showroom AmericasMart Bldg. 2, #1305 Phone: 800-875-1155 Fax: 888-565-0556 www.southeastmarketing.com

Girl Talk

Innovation

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SOUTHEAST MARKETING • summer 2010


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Seriously Funny! VISIT US AT: Southeast Marketing Showroom • AmericasMart Bldg. 2, #1305 To order: 800-875-1155 • Fax 888-565-0556 www.southeastmarketing.com

Fashionably Fun Greetings!

www.avantipress.com 800.875.1155 ©2010 Avanti Press Inc.


Southeast Magazine Summer 2010