Deliver: Lion Brand Builds Pattern of Success With Digital PODEveryone wants to increase customer value. The best companies aren't content to sit on their laurels and let the sales roll in. They always look for ways to better satisfy customer needs and strengthen relationships. Lion Brand Yarn Co. is using the latest tool to become more customer-centric: digital print on demand.
Our market of knitters and crocheters has grown tremendously in the past several years, and it's no longer just your grandmother's hobby. It has become so popular among the under-30 set that it is being hailed as the new yoga. Today, it's hip to knit, and stars such as Julia Roberts, Sarah Jessica Parker and Madonna have taken up the art.
Lion Brand is known for bringing yarns from around the world to the mass market that consumers haven't seen before. We have kept up with the needs of our growing audience over the past 126 years by providing unique products. Fun Fur, a faux-fur yarn that the company introduced a few years ago, has become the best-selling yarn in the United States.
Our business grew more than 150 percent last year, and it is now one of the top two yarn suppliers in the nation. We sell to 8,000 retail outlets as well as on QVC and Home Shopping Network. We also have a catalog that offers nearly all of our SKUs. Yet, despite our success, when we learned of a Web-enabled program that uses digital print on demand to create customized pattern booklets, we couldn't pass up the chance to become even more customer-focused.
In the past several months, not only have the custom booklets generated new sales, but they bring customers to the site at www.lionbrand.com more often, keep them there longer and provide us with tremendous insight into trends and customer needs.
Creating the Custom Pattern Book
In the past, we picked the combination of patterns we thought would interest customers and created books we thought most people would like. The books always sold well and still do, but we could never satisfy the unique needs of every single user.
With the Web-based print-on-demand feature, customers can choose from our 60 most popular patterns and create a custom pattern book with as many patterns in whatever combination they want. Each pattern is discounted at $1.50 (they are usually $2.50) with a minimum order of three. They can customize the front cover in two places. The books are 8 1/2 by 11 inches and are printed on 100-lb. gloss text paper.
Customers buy the pattern books for themselves ("Rose Mary's custom pattern book"), as gifts ("Created especially for Aunt Marjorie, a collection of poncho patterns") or as a teaching tool for knitting and crocheting classes ("For Ms. Allen's October Knitting Class"). Also, stores order pattern booklets that match the specific Lion Brand yarns they carry.
The service we use is from APT Digital Marketing Solutions, Moonachie, NJ. Once a customer chooses her patterns and hits the submit button, the order moves to APT's FTP site, which uses Lexington, KY-based Exstream Software Inc.'s Dialogue software to compile all the data, then push it digitally to a Kodak NexPress digital printing press at APT's facility in Moonachie.
Twice a week, APT pulls down the orders. A set of business rules determines the pagination and creation of an index. The index and page count are variable. The engine then pulls the patterns from our database and merges the rules and patterns to impose the book.
Then the booklets are printed at APT's facility, bound, inserted into an envelope and mailed along with a matching invoice that is printed in a separate process. Since Exstream's Dialogue can process 768 pages a minute, the creation of each book is literally instantaneous. After each mailing, APT transmits a detailed shipment list back to us for our records.
Insight Into Customer Needs
One benefit we receive from offering a customized print-on-demand product is the ability to spotlight trends and customer needs. For example, we get hundreds of e-mails a day from people asking about patterns, and from those e-mails, we can tell which patterns are the most popular. We also see a lot of custom pattern books ordered for teaching, with upward of 30-plus copies of each teaching book. Through these orders, we have started to identify the ideal patterns for teaching and now can devise pattern books in advance that meet teachers' specific needs.
Another trend that print on demand has shown us is the need for custom pattern books for retail stores to sell to their customers. To meet this need, we are discussing placing kiosks in the stores so visitors can download and print the books while they wait.
This new product has let us expand our business without cutting into our original pattern business and without adding resources. There is no human intervention - the process is automated. Unlike the mass-market pattern books, no one has to pick and pack the custom pattern book order. And, because they are printed to order, there is no waste.
But the best benefit of all is the profit. Because of the lower overhead, the profit margin on the print-on-demand pattern books is 20 percent higher than the mass-market books. We even save money on postage and inventory of the mass-market pattern books as a result of the print-on-demand product because we stock less inventory and fewer books are left over at the end of the season. Previously, we would maintain about 50 copies each of 100 active patterns, and we would handle the mailings ourselves.
Also, demand for patterns overall has risen because previously no one would give five individual patterns as a gift. But when you can offer a beautiful booklet, such a gift becomes that much more attractive.