Sharper Image Invents Sales With New Products
Despite fading consumer interest in the Razor Scooter, the company used a motorized version of the product -- the Electric X2, priced at $199.95 -- on its front cover as well as on the inside back cover. The other item, the electric Hot+Cold Snack Box, priced at $99.95, occupies page 3 as well as the top of the back cover.
"Between one-third and 40 percent of our sales are through products we create from scratch," said Tony Farrell, The Sharper Image's senior vice president for creative services.
"The X2 took a long time to develop," he said. "It started two years ago, at the beginning of the Razor Scooter craze. We assumed that the Razor phenomenon wasn't going to last forever, so we developed an electric version of the scooter that looked a little better. Razors have peaked and are fading, and they are ... selling for about $50. This is an electric scooter that is more like a moped."
Julie Hopkins, the company's director of direct marketing and advertising, reported that sales produced by the catalog rose 3 percent compared with last year's September book. The average order size is $144.
"We find that to be favorable in this economy," she said.
Hopkins also said the company's 103 stores were expected to generate 50 percent of catalog-produced sales while 30 percent were to come via telephone and 20 percent through the Internet.
Customers who bought the traditional Razors received an incentive to buy the new product.
"We gave them a special deal that gave them $20 off and was on the cover," Hopkins said. "I think [the special offer went to] 200,000 out of a total mailing of almost 5 million catalogs.
"The $199.95 price point should be pretty solid," she said. "It's a successful launch so far."
San Francisco-based The Sharper Image has four art directors who rotate in creating catalog covers, and they have few restrictions in what they can spend.
"We want to have covers that others wouldn't think to do," she said.
Farrell said that the company's high expectations for the Hot+Cold Snack Box have been exceeded.
"We're scrambling to get that back in stock since some stores have sold out," he said. "We have back orders. We're an item business, and we live and die by the popularity of single items."
The house file received 90 percent of the drop while the rest went to prospects obtained from lists provided by Harrington's, Hammacher Schlemmer, Front Gate, Levenger and Brookstone as well as Abacus models.
"We're looking for names in our store area -- people who are a 50-50 mix, female-male, age 35-55 and over $75,000 in household income," Hopkins said.
She also said that paper and printing prices were falling, and "we get tremendous leverage over our suppliers due to the economy."
The catalog was produced in two sizes, one 84 pages and the other 52. The smaller book accounts for half of the overall circulation and is mailed to those who spend less. The larger book cost 58 cents per piece to produce while the smaller version cost 40 cents.
"We asked ourselves, 'How can we build on the Razor phenomenon?' " Farrell said. "It is the logical way we approach the business -- finding the next thing that is appropriate for The Sharper Image."