Vermont Teddy Bears Down on Gift Market

Despite its slogan that it is the “creative alternative to flowers,” Vermont Teddy Bear entered the blooms business in August by acquiring Calyx & Corolla.

That move was part of a strategy to become a bigger player in the gift market by buying — and introducing — brands beyond its trademark BearGrams, according to Liz Robert, president and “chief bear officer.”

Prior to her joining the company in 1997, Vermont Teddy Bear was in dire straits thanks to a “disastrous” initiative to move the firm more into retail, Robert said during the recent New England Mail Order Association (NEMOA) fall conference. Among other things, the company realized that 70% of the bears purchased in the New York Madison Ave. store were being shipped elsewhere.”

“Vermont Teddy Bear had the most expensive fulfillment center in the world,” Robert said.

The company pared back its retail outlets and quickly refocused on its attention to generating leads by radio. About 85% of the bears are purchased as gifts, mostly by men who need a last minute present for someone special. “‘Late Jack’ is our customer,” Robert noted.

But the firm would also like to attract “Early Jills” who are more apt to think ahead and purchase items like new baby gifts. The hope has always been that recipients will see the bear they got from their boyfriend and remember it as a gift idea when friends have children. This hasn't really happened much, said Robert (coincidentally pronounced “Ro-Bear”).

In surveys, women said they shy away from bear purchases because they see the item as impractical or a dust collector. This led to the company's introduction of its sister businesses, PajamaGram and TastyGram.

With its diverse gift businesses, Robert said the goal is to follow the “Williams-Sonoma and Pottery Barn model” of sister companies that mar ket separately but in a low-key way use the multiple brands to build customer trust.

“The narrower and more focused the ad message, the more you stand out for customers,” she said.

Orders for bears, flowers and pajamas are fulfilled at the company's 60,000-square-foot Shelburne, VT headquarters, which NEMOA members toured during the conference. TastyGram orders are drop-shipped from various locations around the country. The Shelburne call center is now handling calls for all four brands.

Valentine's Day is the company's busiest holiday. The most bears ever shipped on one day — 37,000 — were sent Feb. 13, 2002. That accounted for 10% of the company's sales that year. “It's a challenge to build an infrastructure you need for one day,” Robert noted.

Under a licensing agreement with Playboy, Vermont Teddy recently introduced what it hopes will be a hot product next Feb. 14: a Playmate bear, complete with bunny ears.

But it can be a bear to predict what will be the next big teddy, noted Allen Baker, who conducted one of NEMOA's tours. For example, the “Gangster of Love” and “Love Bandit” bears didn't sell as well as projected, but the “Elvis” bear was loved tender by many.