Welcome to the fast-paced business of retailing, where last-minute changes, overnight press checks and very quick turnaround are the norm. Fortenbery, president of the Liberty Township, Ohio, distributorship, says quick-turn projects are the rule, not the exception, in part because those in retail marketing have grown accustomed to placing newspaper ads the day before a big sale. Hence, the idea of doing last-minute marketing carries over to more sophisticated projects.
But other factors come into play, too. Like farmers, clothing retailers and others in the retail niche are affected by weather. A warm fall can leave retailers overstocked with cold-weather apparel during the make-or-break holiday shopping season. In early December, Lehmann Printing Company, New York, produced 100,000 post cards in less than two days for a retailer who was worried about being stuck with shearlings and other winter apparel in January. The firm's pressman worked through the night to meet the customer's deadline of less than two days, according to David Lehmann, the distributorship's owner. "Retailers think they can get anything done anytime," he explains.
Business Forecast
Ask printing pros who have sold to the retail industry about their customers, and their response often is "I used to sell to...," followed by some of the biggest names in retailing that have gone bust. "Retail is much more susceptible to reorganization and cash flow problems [than manufacturing customers]," says Andrew Duke, president of Metrographics Printing and Computer Services Inc., Fairfield, N.J. And, surprisingly, Duke says, a retail chain's Chapter 11 filing can come just when business seems to be good. When retailers are in a growth mode, they order a lot of printing as they add stores. If the growth is too aggressive or consumers lose interest in the retailer's niche, business can dry up with little warning, he explains.
The economy and the weather influence retail sales, but external events can produce trends no one predicted. The National Retail Federation (NRF) reported that November 2001 sales "showed strong gains in categories related to the home, reflecting consumers' tendency to place their emphasis on family and home activities since September 11," according to a press release. The trend was expected to carry over to the holiday season, with the NRF predicting that "retailers of home furnishings, electronics, book, hobby and music merchandise should continue to do well."
Although retailers provide multiple opportunities for distributors penetrating end users' marketing and affinity program departments, the outlook for forms sales is mixed. Depending on the size and type of retailer, distributors can sell unit sets for applications such as credit memos and return-goods slips. Large, sophisticated retailers, however, have eliminated many internal forms, Duke says.
Because the retail industry is cutthroat and because retailers make a living by buying and selling goods, they are very price-conscious about printing. "Overall, retail is going to be more competitive than standard accounts," Duke says. Some distributors report having to submit a bid for every item, or, if they have a long-term relationship with a client, receiving the "last opportunity" to bid. Even so, the retail market can be rewarding because of the sizable quantities large retailers need and the sophisticated direct mail pieces they request.
The Sunny Side of Retailing
"My focus is how to get the right message to the right people at the right time," says Fortenbery, whose company specializes in direct mail. Omega Marketing's quick post card project was necessitated by a two-for-one sale on a new product. The product's manufacturer cut a deal with Omega's grocery store client to target a promotion to consumers who had purchased similar foods recently.
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The popularity of
preferred-customer programs has benefited distributors selling to the
fast-paced and competitive retail industry.
Sample courtesy of
PRINTSouth Corp., based in
Atlanta.
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It should come as little surprise that grocery stores maintain incredibly detailed information on consumer purchasing behavior, thanks to their frequent-shopper programs. "They are interested not so much in what you buy, but what you don't buy," Fortenbery says. If a customer regularly buys baby food at the grocery store, but never buys diapers and other baby-care products, the grocer will send out coupons or another promotion aimed at increasing sales of diapers in its stores. It's no coincidence that Fortenbery also sells the grocer its frequent-shopper cards, the means for collecting data needed for targeted marketing.
In addition to retailers' affinity programs, new store openings can be a boon for distributors. Again, direct mail is a big seller as retailers target customers in the geographic areas near new stores. Duke provided a retailer with a scratch-off card resembling a lottery ticket that was designed to increase sales in new stores. Consumers learn at the cash register whether they are eligible for a $1, $5 or $10 discount. Handling such a mailing can be complex, especially when multiple stores are involved. Duke's client wanted him to ensure that each location sent out an equal number of $1, $5 and $10 coupons.
Greg Hensel, who's in sales for the Atlanta office of distributorship DSI, has put together training and communication materials for an upscale decorating retailer. He has sold training manuals--complete with color logos, photos and graphs--produced on the firm's DocuColor equipment. Retailers also need employee badges, buttons and in-store brochures when they prepare to roll out a new program, such as a credit program. Orders can be sizable for such projects if the retailer has multiple locations nationwide.
Oddball Items 'R' Us
Pat Stenger has been an account consultant for the Topeka, Kan., office of Single Source Inc. since June. He already has managed to work his way into a retailer with several thousand locations worldwide. Stenger's specialty is researching sources for unusual products that others might turn away. The first order he sold to the retailer was for emergency manuals, with versions printed in English, French and Spanish. One copy was sent to each store to provide guidance and procedures to employees coping with tornadoes, floods or armed robberies.
So far, Stenger has dealt strictly with the retailer's purchasing department, which places everything out for bid. Still, there is a place for creativity and process improvement, he says. Stenger's retail client was looking for an easy way to standardize the delivery process at each store and thought a manila folder for storing delivery receipts might fit the bill. Stenger came up with the idea of a custom, vinyl folder. The retailer's logo and instructions to employees are printed on the front. Two adhesive strips on the back allow it to be attached to office furniture.
When a customer has an idea, Stenger says, he tries to come up with one that's even better. He also sold the retailer 800 cotton and polyester aprons embroidered with the store logo. Stenger was assured of a repeat order six months after the initial sale. The stores' salespeople wear the aprons when they restock shelves.
Duke has sold everything from rub-off tattoos for retailers opening new stores to tray liners used in mall food courts to promote a retailer's products. Lehmann Printing recently sold 22 x 28-inch 4-color signs mounted on foam core for a retailer with a location in a New Jersey mall. Previously, the firm had handled business cards, letterhead, envelopes and sale post cards for the customer.
Fortenbery sums up the retail marketing business by saying, "I think it's a fun place to be because it's so dynamic. Retailers are still going through the mental shift from mass marketing to target marketing." That means they need the services of Fortenbery and others, who can help provide mailing list management and sharp-looking advertising pieces.
5 Observations About the Retail Industry
1. Bar coding isn't just for hang tags
anymore. For the past few years, retailers have required bar codes on many marketing pieces to facilitate their efforts to collect information about consumers. Detailed information, in turn, leads to more targeted marketing. A coupon might contain a bar code indicating that the recipient holds a store credit card or recently moved to the store's prime selling area, according to Andrew Duke, president of distributorship Metrographics Printing and Computer Services Inc., Fairfield, N.J.
2. In a slow economy, all retailers are not created
equal. Retail sales frequently are cited by experts as a bellwether of the economy. But a slow economy doesn't necessarily mean slow business. "When business slows down, most retailers will advertise more," Duke says. This could mean an increase in direct mail printing, in-store signage and coupons, particularly in the slow retail month of January. Certain retailers, such as discounters and auto parts stores, are likely to benefit from a slowing economy, while grocery stores and drug stores are fairly recession-proof. Naturally, when consumers get jittery about finances, high-end retailers are the first to feel the pinch.
3. Sleepless nights happen. Because retailers need lots of commercial printing produced quickly, Duke has handled press checks for retail clients on weekends, in the middle of the night and early in the morning. Having clients sign off at every stage of a project is essential, distributors say. Printing the wrong sale date or wrong price happens more often than retailers would like to admit. Of course, even if the client errs, chances are you'll be scrambling to have the piece reprinted correctly.
4. Color matters. If you've spent your career selling unit sets and cash register receipts to retailers, you'll need to get up to speed on process printing. "You can't have turkey looking kind of greenish [in a direct mail piece for a food retailer]," explains Jeff Fortenbery, president of Omega Marketing Services, a Liberty Township, Ohio, distributorship. Through the years, he has cultivated relationships with manufacturers who keep food photos on hand showing acceptable color. Getting the color right is also very important to clothing retailers. Unlike banks, who distributors criticize for using black logos, retailers are obsessed with printing their colorful logos on everything to cement their identity with consumers. Even discount retailers will spring for color logos on mundane products and internal training materials, distributors say.
5. Personnel problems equal profit potential.
Just as in the hospitality industry, large retailers hire many employees and experience high turnover. That means employment applications, employee ID cards, name badges, W-2 forms and training manuals are needed in large quantities by retailers with multiple store locations.
