Anybody with a penchant for fine pens knows A.T. Cross. What some writing enthusiasts may not know is that the 161-year-old brand has a catalog. The Lincoln, RI-based pen maker dropped 350,000 copies of its first catalog in November 2005 to customers whose names were culled from warranty cards and Cross’s two Boston-area stores and to rented names.
The catalog is not the $139.3 million company’s first foray into direct marketing; Cross has had a Website since 1999. Its direct-to-consumer sales grew about 30% last year, compared with 2% growth within its other divisions. Besides its direct business, Cross has wholesale relationships with about 50 retailers including OfficeMax, Staples, and Office Depot, and has marketing subsidiaries and stores in Canada, Europe, and Asia.
Prior to the Website’s launch, “if you wanted to buy a Cross pen and didn’t know where a pen store was in your area, you were out of luck,” says Chad Mellen, senior vice president, global marketing and sales. “The direct channel has allowed us to reach consumers that we may not have ordinarily have gotten.”
As for the print catalog, it’s “a very effective tool for us to communicate our message rather than other types of advertising,” Mellon says.
The advance word on Mellon was that he’s a marketing superstar. A former executive with luggage brand Tumi and leather goods merchant Coach, Mellon was hired in January 2005 to revamp the Cross brand. When Multichannel Merchant visited the company’s headquarters in early April, Mellon was fairly candid about Cross’s ups and downs but at the same time guarded and measured in what he said.
In fact, from visiting Cross, one gets the sense that it’s still an old-school company wary of outsiders stealing its secrets. For our appointment we were ushered from the lobby into a glass conference room about five feet away; after the interview we were not offered a tour of the building.
Another recent addition to the Cross executive suite is director of global marketing Tom Peterson, who joins us for our interview. Peterson has a fashion background, having worked with upscale hair products brand and salon Bumble and Bumble prior to joining Cross last year. After a slick 10-minute video presentation on the history of Cross, we get down to business.
The decision to mail a print catalog was born out of necessity, Mellen says, as the iconic brand was not relevant to today’s consumer, especially in the electronic age.
“The writing instrument category, or quality writing instruments [QWI], was declining. There were some significant changes as to how the QWI products were being distributed in the U.S.,” Mellen explains. (Mellen and Peterson were both kind enough to ignore that we were taking notes with a DWI — downmarket writing instrument.) “Department stores that carried our product were either closing or no longer carrying pens,” Mellon continues. “And the U.S. office-supplies stores found that inventory turns didn’t turn fast enough for them.”
Mellen and Peterson set out to transition Cross from a pen brand to a fashion accessories brand. Cross now sells watches ($100-$200), leather products such as portfolios and wallets ($90-$135), and reading glasses ($25). Last year 30% of its writing instruments and accessories revenue was generated from new products, with sales for that segment as a whole up 2% from 2005, to $111.9 million. Sales for the optical segment increased 40%, to $27.4 million.
Cross’s resellers weren’t upset about the company’s decision to expand its product line. But some had been unhappy when the pen brand started selling directly to end users eight years ago, with several retailers threatening to cease carrying Cross merchandise.
“When we led with our e-commerce initiative, we were the only QWI brand that sold directly to the consumer,” Mellen explains. “The response is not unusual for any other brand that tries to sell directly to its consumers and is exacerbated in our industry by the fact that there is no one in our industry, besides Mont Blanc, that sells directly to the consumer.”
But Mellen understands the retailers’ perspective. “The retailers were dealing with the exact same thing that we were: a declining category. So the shrinking pie got smaller, and they had a new competitor for that shrinking pie.”
Cross spent two years preparing its first print catalog. Although it had a large customer file, “it was comprised of 14 different sources, which had to be consolidated into one true customer database,” explains Mellen. “We had no recency information, no purchase information. We couldn’t do anything with it. And some of these files hadn’t been touched in years.” Mellon enlisted Monica Smith, president/CEO of Montclair, NJ-based consultancy Marketsmith, to help Cross with its direct business.
In addition to coordinating and reshaping Cross’s marketing database, Smith addressed the company’s contact points, including the contact center, to make sure the message was unified. She also helped with product fulfillment, because shipping to consumers is vastly different from shipping pallets of goods to retailers. Depending on the catalog’s performance, Cross will likely mail several catalog editions this year.
Cross is still learning the nuances of print catalog copy, Peterson says. “We’re finding out about tone — specifically, how much copy do you allocate in making the catalog a branding vehicle, and how much do you make it a selling vehicle.”
Peterson says the company is also trying to strike the balance between photography and copy. “We keep asking ourselves, ‘What’s the key product information to go with the picture?’”
As for page density, Cross is learning that more is more. “If you compare the most recent catalog mailed compared to our books of the past, you don’t realize the increased density,” Mellen says, although the increase has in fact been fairly dramatic. Since the initial catalog, Cross has increased page count 20% and product density 60%. “We started off with [an average of] over three units a page and now we’re over five,” Mellen says. The debut catalog was 20 pages; the recent spring edition was 24 pages, and the next fall/holiday catalog will expand to 28 pages.
There have been several surprises as to what works in the catalog and what doesn’t. In the spring catalog, an Italian leather desk accessories set, which sells for $350, was a major disappointment in terms of sales. “We thought it was going to be a home run,” Mellen says. “It was aggressively priced and is just beautiful. That was a big surprise.”
On the other hand, the success from the Cross Tech 3 ballpoint pen collection — which sells for $35 and allows the user to switch from black ink to red ink to a pencil — “always amazes me,” Mellen says. “It consistently sells no matter where in the catalog we feature it.”
Wall of pens
As a way to convey the new, improved Cross to shoppers and to make the process of selecting a high-end writing instrument more user-friendly, the company created a “pen wall” in its Boston store last year.
As director of global marketing Tom Peterson explains, the concept behind the pen wall was to make the shopping experience more interactive. It was designed originally to just display the writing instruments, but “we have made modifications so that it now can house small leather goods, readers, and watches as well.” Cross plans to build more than 70 pen walls this year in its stores in Europe and Asia.
Traditionally, Peterson says, pens are shown in a case, with the consumer looking down at them and with little opportunity to distinguish collections. “In our pen wall, we have a vertical format that puts the pens at eye level and allows us the opportunity to tell the consumer more of a story about each pen, as well as providing a visual punch to the shopping environment,” he says. “Our pen walls are designed to be open sell, with demo pads that pull out so that you can test the product, tester drawers below so that all product SKUs are readily available, and inventory housed in drawers below. By eliminating the showcase, we have eliminated a barrier in the shopping experience.”