Small Business

Shining Brighter in Dark Days


By Lillian Vernon The past few years have been difficult for most retailers. Consumer confidence plummeted following September 11, followed by anthrax in the mail, followed by Americans worrying about the economy and job security, and then the war in Iraq. The marketplace became overcrowded with tens of thousands of traditional retailers and e-retailers competing for shrinking consumer dollars.

These challenging times require creative solutions to survive and thrive. In the direct-marketing industry alone, there is a glut of over 10,000 catalog titles. Creative marketing plays an instrumental role in helping Lillian Vernon stand out in this competitive retail environment.

Most major gift and houseware retailers buy their merchandise from the same manufacturers and attend the same trade shows, both domestically and overseas. Many products they sell are variations of the same themes. These days, consumers want and expect more variety because they have so many choices. They'll buy from many different companies without staying loyal to a particular brand. This presents a challenge for retailers who want to maintain and grow their customer base. They must be innovative and develop new and different ways of doing business to attract new customers.

CREATIVE MERKETING. When I launched my mail-order business in 1951 on my kitchen table, I knew that offering personalization would be a creative way to make my products stand out. I designed a basic commodity -- a leather handbag and belt -- that I knew young women would want to buy. What made these products unique and attractive to my customers was that I offered to include their initials at no cost. I felt they would enjoy wearing something that expressed their individuality, and my hunch proved right. My first ad in Seventeen brought in $32,000 in orders -- and I was on to a winning concept.

Today, many retailers have followed my lead by offering mass customization. But few offer it for free, a service that has become our company trademark. Over half of the products we sell can be personalized.

Creative marketing means customizing your products and services so they are different from those of your competitors. This is not an easy task, but if you carefully research the marketplace, scout out the unusual, and develop your own exclusives, you can develop a trademark that will stand out. The key is staying one step ahead of the competition.

From the beginning, I knew that mail-order was a challenging business because it involves consumers buying on blind faith. This required a creative marketing solution, and I met this challenge by introducing one of the most liberal return policies in the retail industry. For 52 years, our company has offered a "100% satisfaction guarantee," where we offer a replacement or refund on all our products, including personalized ones, with no questions asked -- even 10 years later.

CREATIVE SOLUTIONS. Problems that could prove costly or even fatal to a business can be turned into profitable solutions using creative marketing. For example, when Lillian Vernon was growing rapidly in the early 1980s, we had huge inventory of overstocked and discontinued products. This was tying up our warehouse space and capital and suffocating our business. My creative solution was to launch our first Sale catalog that became an ongoing catalog title and a profitable way to dispose of excess inventory, the bane of all retailers. The success of our Sale catalog prompted us to open outlet stores along the East Coast, where we have a large customer base and widespread brand recognition.

Taking a chance on a new business venture can present an opportunity for creative marketing. At the earliest stages of the e-commerce industry in 1995, Lillian Vernon became one of the first direct marketers to launch a Web site. Our early exposure and experience online helped us attract a broader demographic of customers and gave us the opportunity to introduce our products to a different market segment. Our Web site, www.lillianvernon.com, is now the fastest growing and most exciting part of our multichannel business.

Entrepreneurs and business leaders who "think outside the box" will benefit most by their vision and creativity. Successful companies must continually reinvent themselves through creative marketing to remain competitive and grow. The ones who are afraid of change will eventually fall by the wayside while their industry leaders surpass them.

Lillian Vernon, 75, is founder, chairman and chief executive officer of Lillian Vernon Corporation, a specialty catalog and online retailer that she founded 52 years ago on her kitchen table. Through its seven catalog titles, the company sells gifts, house wares, gardening, Christmas, and children's products. In fiscal 2003, Lillian Vernon, headquartered in Rye, New York, shipped 4 million orders and posted sales of $259 million. In April 2003, Ripplewood Holdings and Zellnickmedia made an offer to acquire Lillian Vernon Corporation after a shareholder vote in July. Entrepreneur's Byline comes to BusinessWeek Online readers courtesy of EntreWorld.org, a resource for entrepreneurs that is sponsored by the nonprofit Ewing Marion Kauffman Foundation.


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