Not-So-Risky Business

Barry Gilbert, the CEO of cataloger/retailer Smith & Hawken, got one of the biggest laughs at this year’s Annual Catalog Conference during the opening day Power Forum. Gilbert, whose company had started as a cataloger before becoming better known for its chain of shops, had been asked what advice he had for catalogers who were considering branching out into retail.

“I would pause,” Gilbert replied. “Have a drink.”

He went on to say that retail is perhaps even more competitive than direct marketing and that the U.S. is “overstored.” The other members of the Power Forum — Brylane CEO Eric Faintreny, J.C. Whitney president Tim Ford, and CDW vice president of strategic marketing Fred Neil — agreed. Given their responses, you’d think that a cataloger would be more likely to scale Mount Everest with a monkey tied to his back than to make money by expanding into retail.

Then again, the Power Forum participants were downright bullish on retail expansion compared with how they felt about marketing overseas. Selling overseas is “a very tough way to make a buck,” Gilbert said. “We have such a big market in the U.S. that if you can’t make a couple billion here, you won’t be able to make it anywhere else.” Ford agreed: “We have a hard enough time understanding all the cultures in the U.S.”

The panelists raised very valid points, of course. And they obviously know of what they speak, given the strength of their companies. But I couldn’t help feeling a bit…sad, I guess, that “play it safe” emerged as one of the themes of the session.

Especially because the past three years have been about risk avoidance — a natural reaction to the dot-com bust, the events of 9/11, and the parlous state of economic and global affairs. I guess I was hoping that the years of laying low and focusing on maintaining rather than growing would have produced pent-up demand for risk-taking. I was almost nostalgic for the mid-1990s, when folks like Jeff Bezos went ahead with their crazy schemes (an online-only bookstore with prices barely covering costs!) despite the naysaying of pragmatists.

Perhaps the greatest casualty of the go-go ’90s and their decline wasn’t Pets.com or eToys or the portfolios of those who had invested in the plethora of Web-related companies. Perhaps the greatest casualty was a sense of adventure and hope.

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