Mining new niches

Amid the storm of catalog mergers and acquisitions, one mailer is opting to grow from within. Concepts Direct, which produces the Colorful Images catalog of personalized paper products and the Linda Anderson midprice gifts catalog, is determined to build its business not by acquiring other companies but through new catalog development and better database marketing.

“We named our company Concepts Direct to reflect our commitment to building the business through many catalogs,” says Phillip Wiland, chairman/CEO of the Longmont, CO-based company. “We’re not content to rely on one successful catalog.”

To jump-start this process, last fall Concepts Direct launched Snoopy Etc., which sells gifts featuring Snoopy and other characters from the “Peanuts” comic strip, in response to the large number of customers ordering “Peanuts” address labels from Colorful Images. Last fall it also developed Linda Anderson’s Collectibles catalog, which sells Hummel figurines and other collectibles, after noting the strength of the product category among Linda Anderson customers.

Linda Anderson has 250,000 names in its database; Colorful Images has nearly 7.7 million. Snoopy and Collectibles have 34,000 and 27,000 customers, respectively. “Our database is large enough now that we can offer customers a wider selection of products in the niches in which they’ve made purchases in the past,” Wiland says.

Concepts Direct’s determination to make the most of its database isn’t surprising, given that the company is an outgrowth of Wiland Services, a database company that was sold to Neodata in 1992. The strategy is paying off: The spin-offs contributed to Concepts Direct’s 54% growth in annual net sales, from $51.1 million in ’96 to $78.5 million last year. And corporate income has nearly doubled, from $842,665 in ’95 to $1.6 million last year. In the past, Colorful Images accounted for most of the profit. “Until now, we’ve had one profitable book paying for the others. We’d like to have maybe four paying for only one or two,” Wiland says.

The success of the specialty books has Concepts Direct excited about other spin-off ideas, some of which it hopes to implement next year. The popularity of golf-related labels, for example, might prompt a golf-related gift catalog. “We’re trying to build customer databases based on different categories,” Wiland says.

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