International sales increased an even faster 30%. The company also reported a record profit of $857 million during the second quarter and accelerated expansions ...
(Page 2 of 2)
It’s also reduced catalog mailings by about 5% from last year. Though that’s largely due to reduced customer response in the recent economy, the company is hoping that a positive online shopping experience will convert some catalog shoppers to the web, for savings on postage and paper. While the catalogs rule as a means of acquiring customers, filling the resulting phone and mail orders is expensive. Vernon says it’s cheaper for the company to make a sale on the web.
And in many cases, she adds, it’s simply a more effective way to take an order. Take the issue of personalized merchandise. Free initials on everything from towels to backpacks has been a standard offer at Lillian Vernon throughout its 50-year history, but there can be slip-ups on spelling at fulfillment time. “The name Hillary is the perfect example. A lot of times people don’t know how it should be spelled,” Vernon says. “And when the order gets there spelled with one L, someone decides there should be two. The web makes it much easier to check the initial order.”
The catalog fan
While recognizing-and with the site re-launch, seizing on-the web’s benefits for her company, the boss herself confesses to being a diehard catalog shopper. It’s one of the reasons Lillian Vernon catalogs are generally in the smaller digest size; besides being smaller to mail, they’re more portable for those who, like Vernon herself, prefer to read and view product images on paper. “I like the leisure of being able to read a catalog,” she says. “But that’s just me. Our customers are proving that I’m in a minority.”
The company logged in 4.6 million orders across channels last year, some 289,000 in its pre-Christmas peak week alone. It publishes eight paper catalog titles including the Rue de France catalog, operates LillianVernon.com and RuedeFrance.com, serves more than 2,000 corporate and b2b customers, and has 15 outlet stores in addition to one Rue de France store. There’s the 1-million-square-foot national distribution center and warehouse facility, big enough to cover 21 football fields. And over the past five years alone, the company has slapped its logo on 878 million individual catalogs, 28 million shipping boxes and 93 million products.
That puts Lillian Vernon’s current multi-channel empire a long way from its 1951 mail-order roots. Having fled her native Germany before World War II, a young Lillian, who later changed her own last name to match that of her growing company, settled in New York. She started out by placing a $495 ad for a personalized handbag and belt in Seventeen magazine and with the receipt of $32,000 in orders, her business was launched.
The kitchen table
Vernon likes to point out that her company started out at her kitchen table. “Our core customer is a homemaker,” she says. “That’s probably why they like shopping with us. Because I kept house for many, many years; basically, I’m a homemaker, too.” But anyone expecting a lace-knitting, Old World homebody would be mistaken; she’s a sharp-witted, wisecracking businesswoman, a no-nonsense realist and crackerjack direct marketer. While her past life may help her keep her finger on the pulse of her customers, it’s long since been superceded by her recognition in the industry as a leading cataloger. Over the years, she’s received numerous awards including induction into the Direct Marketing Association Hall of Fame and a place in National Foundation for Woman Business Owners’ ranking of 50 leading women entrepreneurs, to name but a few.
Part of that success is built on a willingness to be open to change, even while staying firmly fixed on the wants of her long-time customer base. The web wasn’t even on the horizon in the company’s early days. But she was savvy enough to recognize the Internet for the opportunity it is-influenced in part by the enthusiasm of her husband, a New York businessman, for eBay. “I knew right away that the web would be a new channel for distribution, another way we could sell,” she says. “And that’s how we’ll treat it; as another business that has its own needs to make it grow.”
And as they grow, Lillian Vernon’s web sales are taking on increasing importance in the company’s overall strategy. “I’m telling everyone here that the web has got to be a big profit center,” she says. “A lot of people in direct marketing have spent as much on the web as we have now, and they’ve made it into a $100 million division.”
And does she see that in her company’s own future? “I can’t tell you the time frame,” she says, “but I absolutely hope that will happen.”