Mark Janson-Smith, managing director of Postmark, The Retas’ award-winning group of four London card shops, serves up some serious ‘food for thought’ to protect Spring Seasons.
For a huge number of people sending a card is linked to an event, particularly those big Spring moments like Mother’s Day, Father’s Day and Valentine’s Day. Prompted by a reminder that it’s an ‘occasion’, they head out, pick up a card and off it goes.
For independent card retailers like us, these ‘occasional’ customers are a vital source of income and we always go out of our way to encourage them to send a bit of happiness through the post a couple of times a year, sourcing and buying an appealing selection of cards for them to choose from for just these occasions.
As the Cardsharp article in the recent issue (August) PG highlighted, there are rumours that some card publishers are considering halting production for a number of these Spring occasions, which is hugely worrying.
While the more profitable Mother’s Day event seems protected, there is a fair amount of talk of publishers dropping out of publishing cards for Father’s Day, Valentine’s Day and Easter.
The reason? Card publishers feel they just can’t make any money from these poorer performing Spring occasions as so many retailers expect full Sale Or Return (SOR), with costs further escalating for those who supply through brokerage. As I understand it, once discounts are taken into account and then the costs of returns, there is simply no margin to speak of and many publishers often face a loss.
If this is true, it sounds to me a sad state of affairs for the industry and something we all urgently need to address. A halt in production for these occasions will have a huge knock-on effect to us all in the industry. Great designs are likely to dry up or it may narrow the choice, making it impossible for independents like us to create an appealing collection and entice the card buying public. This in turn could run the real risk of pushing these vital occasions off the calendar, taking with them much needed revenue.
Or, taken to the extreme, if these occasions do survive it will most likely be in niche markets such as Etsy, where thousands of cottage industry publishers can offer customers the most precise caption and a depth of offer that a traditional store like us just can’t.
Looking at it objectively, SOR is a strange state of affairs. I can’t think of any other financial interaction where the burden of financial loss is shared so very unequally among those involved.
Yet on paper, as a retailer, SOR seems like a no brainer. If you have a box of cards that are on firm sale and a box of cards on SOR, it is obvious which cards will get prime shelf space. However, I’ve heard horror stories of entire orders on SOR being returned unopened, or of retailers blatantly over ordering so their shelves are full until the very last minute, but at the publishers’ cost. To me these buying practices are unacceptable and makes some of the publishers’ decisions to pull out of these seasons understandable.
In fact, one of my favourite industry stories centres on just this dilemma.
Way back in the early 90s a well-respected publisher (now retired) had a meeting with a national retailer. After showing the retailer his card designs, the buyer asked if he could return the cards that they didn’t sell? The publisher smartly responded: “Hang on a second, let me ring my printer and ask if he will take back what we don’t sell.” To which the buyer replied, “Really? You’d do that for me?” To which the publisher quipped: “Of course not, I’m here to sell you cards, not lend you cards!” Needless to say that meeting didn’t end well!
So yes, SOR gives retailers a degree of comfort, knowing that one bad decision won’t end up in piles of dead stock. However, we have to take responsibility for how we use SOR and the impact it is having on our industry, not just in Spring Seasons but across the whole year.
For us, the number one factor in our decision-making when buying is the design. If we LOVE the design then we will buy it regardless of the margin or terms. If we LIKE the design then, yes, the margin and terms will play a bigger part in the buying decision. As the offering out there is of such high quality, if it is a close call between one range or another but one offers a higher margin or more flexible terms, then naturally we will lean towards the more favourable one.
Recently we’ve started to move away from asking for full SOR, instead agreeing an upfront percentage of sale or return with our publishers, where we can.
For me, this is a much fairer system for everyone involved. The publisher knows where they stand from the outset and what their maximum liability is. Moreover, the orders are likely to be of slightly higher value as buyers can be a little more bullish given they still have something of a buffer, meaning they are unlikely to end up with loads of end of lines.
The only drawback is that you have to try and work out your numbers beforehand; to gauge what will be hot and what won’t be quite as hot – but isn’t that the fun of being a buyer?! There is that joy when you get it right and the ‘what is wrong with customers these days?’ when you don’t!
Right now the Spring occasions are looking much more important and attractive for us retailers than for publishers. They entice people into our shops and keeping the wonderful gesture of giving a card at the front of people’s minds, so it really is in our own interest to keep them alive.
There is definitely a better way forward and I believe we can all work together to find it. We need publishers and publishers need us. Without each other, the industry simply won’t work, but for it to work properly it simply has to work better for everyone involved.