Your Registry®, Inc.

2003 Gift Registry Series,
Part I: Building Blocks

The Gourmet Retailer
February, 2003
By Michelle Moran

This year, our three-part gift registry series will examine how retailers across the country have constructed the gift registry portion of their business. In Part I, we discuss what to do to prepare for gift registry, and then in Part II, we'll take you through how retailers work with registry customers and their guests, and finally, in Part III, we'll illustrate successful follow-up strategies. If you believe you have a great gift registry story to tell and would like it to be included in this series, please contact Michelle Moran at mmoran@gourmetretailer.com.

If you build it, they will come. Actually, if you build it correctly after researching your demographics and understanding your customers' needs, they will come.

Just as in the case of opening a retail store, the business of gift registry requires due diligence before a successful operation can begin.

Check out the Competition

Whenever you think gift registry, don't limit your thinking to bridal registry. Today's gift registry should be all encompassing and offer all your customers and their friends the opportunity to register for any upcoming life event. Begin your research by looking first at the competition and second at your own customers' needs.

"We went out and looked at every registry we could. There was a team of us who went out and registered. We put together a questionnaire of what worked and what didn't so when we started our own registry system, we knew what we were looking for," explained Carol Nockold, Sur La Table area manager and registry team leader. "One of the things that was important to us is that it's not a bridal registry — it's a gift registry for any occasion. A part of our demographics is an older group who aren't necessarily going to get married."

Nockold continued, "It's absolutely key to understand the demographics of the customers. Who is going to come in for a registry? You have to know who your registry customer is — that's why we didn't want one that just appealed to bridal."

Elsa Pinto-Melikian, president of Your Registry, Inc., a Sacramento, Calif.-based gift registry service provider, agreed.

"You need to create a sense of exclusivity. For example, stores that have dedicated gift registry areas illustrate that they treat their customers special. That's how you attract and keep gift registry customers," she continued. "Ultimately, it's not what your competitor is doing that will make the difference, it's how you can create a special experience for your customers by knowing what they like — that will keep customers loyal to you. Big-box retailers are impersonal, so you need to make it personal, interesting, and fun. Have the store be a reflection of what you love — that energy will resonate within the customer. Still, you can't attract or treat or follow up until you are prepared to support your registry program completely."

Competitive tips include enlisting your friends to register with every store that offers gift registry in your region, plus getting listed on a few online locations. Have your friends note what the stores offer, including any special services; how the registry is marketed; and what type of service they received. For online registries, be sure to see how the sign-up operates and how accessible it is for guests.

"The biggest mistake I see out there personally is that store owners treat gift registry as an afterthought," Pinto-Melikian said. "They need to create a sense of excitement. The treatment has to be respectful, educational, and most of all accessible."

Getting Started

If you've never had a gift registry before or haven't really concentrated on this part of your business, consider that conservative estimates show registry is a good source of additional income, providing a potential of 12 to 25 percent of your total store sales. Jane Fowler, co-owner of Gourmet Pantry in Lubbock, Texas, began offering gift registry service three years ago.

"We think it's a lucrative business and it's certainly a wonderful off-season business," she explained. "We developed a very strong third and fourth quarter in our gourmet business but our springtime was really weak. Then, we completed the picture with gift registry and we are every bit as busy in the springtime as we are in the fall and winter."

With those numbers dancing in your head, you may want to jump with both feet into the fray. But stop right there. Gift registry is not a simple undertaking and should be given the same consideration as when you first thought of opening your store. Making sure that the registry project is financially feasible is critical. Unless you are independently wealthy, most of you are trying to make a living with your bricks-and-mortar store.

Registry veterans suggest meeting with your accountant, staff, partners, and banker — everyone involved — to review your current financial picture. Discuss this project's potential costs and how they would "fit" into that picture to be sure the registry project does not cause financial stress. In your discussions, consider how this "project" will fit in with other plans you have for the store's growth.

From these meetings and discussions, create a financial "goal" for the program. It is crucial to create realistic expectations with measurable "milestones," allowing you and your staff a sense of accomplishment. Create a monthly/yearly outline of expected expenses for the registry project. Include advertising, printing, personnel, hardware and software costs, plus printing, Web site, ISP, and design costs, etc. Compare the project's potential costs with its potential revenue-generating ability.

"Knowing the long-term effects of the capital costs associated with entering the registry business will allow you to manage the cash flow that is necessary to create a state-of-the-art service," Pinto-Melikian said. "Many merchants simply cannot afford the cost of 'entry' into this game. This is why big-box stores dominate the registry business. Do your homework, or you will be buying software, hardware, or design time you cannot afford."

Organized management of the project will help the project maintain its momentum and not miss key issues. Do not lose sight of the gift registry project's goals. Good shepherding is the key to success. The number-one reason for registry failure is poor shepherding. Create a time line for completion of the research and the project's initial launch.

Improving Existing Registry

The first step to improving your gift registry is to review what it is you're trying to do. Review areas discussed earlier — your demographics and competition — and conduct a customer survey in your store, as well as an overview of local competitive registries. Then look at your registry itself.

According to Pinto-Melikian, 85 percent of gift registries within independent retailers' stores rely on paper-registry formats. She recommends reviewing this entire assessment form and considering a service that is "state of the art"; in other words, accessible 24/7 over the Internet.

"A small percent, only 15 percent of the market is buying online; however, the bride and groom will often make the decision as to where they register based on whether there is online access to the registry," she said.

Each individual store has to determine its own registry options, but understand that today's gift registry consumer is Internet savvy and nearly every retailer we spoke with agreed that some level of online registry is essential.

For Sur La Table, balancing their Web site with their bricks-and-mortar outlets was essential. While studies show most gift registry creation occurs online, a great number of purchases are actually made in the store. Creating a strong visual in-store presence with a team of professional staff members who work directly with customers is critical.

"We knew from our analysis that the majority of our competitors' registries were created online and the majority of purchases were made in the store. We wanted people to come into the store and register easily for anything in the store and then also have them be able to access it online," Nockold said. "It is a great way to drive business. It's found business. Often, it's people who have never been in the store before. You can gain a brand-new customer for life if you do it right."

That potential new customer is a key reason why you should consider having gift registry and if you already have gift registry, that customer is the reason you should be sure it works.

Sur La Table discovered along the way that its registry didn't quite measure up. Its first foray into online gift registry was through a retail portal (a dedicated Web site company grouping assorted retailers), but as that system changed over time, Nockold and her team began to seek other options. After researching their demographics and competition, and polling customers, they chose to create their own registry housed separately from their online store.

"Because our Web site doesn't include every single item we carry in the store, the registry site had to be housed separately from our Web site. When you have over 12,000 items, getting photo images is a big challenge," she explained. "It was hard to find a (registry) company that could work with us. We're not big enough to build a registry from scratch. In the end, we have a workable system — it's not perfect, but it's pretty darn good."

After nearly a year of research, Sur La Table chose to go with MarCole Enterprises, using their systems to create their online registry store. It entailed a long year of studying competition, plowing through demographics, and testing sites. In the end, a time crunch presented itself because the contract with their previous service provider was ending. Nockold said she would have loved more time to get everything in order and recommends retailers give themselves at least a year to study their options.

"One of the reasons a retailer would have a registry system is so that you can follow that part of the business and track it. Our reporting was pretty weak in the beginning — we had to develop that as we went along," she continued. "Because we thought most of the registry would be done in the store with the scanning device, we didn't have the catalog-search capabilities online. We didn't think it would be a big deal and it turned out to be huge. We have finally resolved that and now you can hold our catalog, type in the SKU, and register for it."

Fowler's roadblock in moving from paper into cyberspace is also the inventory tracking. While Gourmet Pantry has a successful Web site and toll-free business, finding the right program to link their gift registry, bricks-and-mortar, and Web site has been a challenge.

"We have searched for good software and have not been able to find anything to fill our needs. It is really important to these brides to have their bridal registry online and we're really missing the boat," she continued. "We have a great Web site but we haven't been able to get the bridal registry on it with a link to our inventory system. Tracking has been our biggest problem."

Research. Research. Research.

Just as Sur La Table's registry team discovered, it requires a lot of legwork to completely understand the option of gift registry available today and most importantly, select what fits your store.

Some of the necessary items for a "state-of-the-art" registry included: Hardware, software, Web site, Internet access, phone requirements, and other technology you may need. You also need to review your own time resources and your staff's availability and enthusiasm for the registry program.

Promoting Your Registry Store

Also important to your gift registry's success is how you describe it. Not every registry customer will be a bride. Some guests might want to create ongoing registries or wish lists for their family and friends to purchase from for a wide range of holiday and special occasions. Others may be celebrating an anniversary or a milestone birthday, so be sure to be all inclusive in your registry promotion, thereby prompting potential customers to consider their own events as registry worthy.

"We have been promoting it in our catalogs and we have had contests to get people to register," Nockold said. "We also have signage in the stores. We have done a few bridal shows, but that's not really our target audience. Some of our really successful registries are for people who are registering for a key birthday — 40th or 50th. We make sure we suggest a wide price range from a token gift to a really extravagant present that five people can go in on."

Another area Nockold believes is of critical importance is policies. Be sure your customers understand your return policies, and whether store credit or cash back will be offered. Whenever possible, state your registry policies in any materials you create describing your registry.

Nockhold explained, "I think it's really important that people are aware of what their policies are. Make sure policies are listed up front. It keeps you out of hot water later."

The Gourmet Pantry promotes its gift registry along with other store features in its twice-daily local television sponsorship spot that runs prior to the Mr. Food Show. The bridal registry/tabletop spot rotates with the store's gadgets commercials.

"We have a spot running all the time with dishes and suggestions for bridal registry, which does really well for us. Newspaper and radio does nothing for me," Fowler explained. "Primarily, it has really been word of mouth. One bride leads to another bride, if you are doing your job right."

While the Fowlers are working hard to change their own "Bridal Registry" mentality to "Gift Registry," it's not been as difficult for their customers who are coming in to register for a variety of occasions.

"We do not target anything except the bride. But the gift registry phenomenon is happening by itself. People are coming in and filling out a registry for themselves, their husbands, and friends with items they just want for a special event in their lives," Fowler concluded.

Attract registrants to your store by keeping them informed. Talk about your registry, even your plans to begin a registry, in your newsletter and targeted mailings. Invite customers to a holiday open house during which you explain your registry process, policies, and perks. Illustrate the popularity of gift registry every time there's a "Wish List" opportunity in the store by listing reasons to register — Valentine's Day, housewarmings, and Christmas.

Pinto-Melikian suggests talking to local non-profit organizations about starting their own "Wish Lists" that can be promoted in their newsletters.

"It's a phenomenal way to grow your base of business and help your community. Offer the nonprofit group every product on the list at a 10-percent discount and they will promote your registry to their contributor base or congregation."

Be sure to market your registry in your store as well with signage, flyers, and other visual merchandising. Promote gift registry with your staff by educating them about the service and encouraging them to talk to customers about it at every opportunity.

Eventually, the way your potential registrants perceive and are treated in your store is what will make the difference. That's the next step in the gift registry process — what to do with the customers and their guests once you have them in your store (or at your Web site). We'll discuss all this in 2003 Gift Registry Series II.

What's Your Style?

Whether you're just starting out on the road to gift registry or revitalizing an existing program, Your Registry, Inc. Founder Elsa Pinto-Melikian points out some questions you should ask yourself. To be a key player in the gift registry game, you must possess good information. There is no magic about this — if you know more, you will accomplish more. Once you complete this "homework" assignment, you will be able to more effectively target your customers, create more accurate marketing plans, and formulate smarter strategies. You simply cannot start any program without completing this information, and you cannot maintain a successful program without it.

To grow your current business and create "value" for your customers, you must differentiate yourself from the field.

Whether you are just getting started or you are currently offering gift registry, it is essential that you know whom you are up against and how you rate in comparison.
• Who are the stores? Create a dossier on each competitor.
• How far are these stores from your's?
• What products do they carry?
• What advantages do they have?
• What disadvantages do they have?
• How does their service work?
• How does it differ from yours?
• What could your registry service offer or be "like" in order to attract their customers?
• How much of the registry business in our area can I potentially "own"?
• Have you taken a close look at your store lately?
• Do you stock the type of product that people want to include in their registry?
• Is your store better or different at something?
• Are your products current?
• Are you happy with the quality of product and variety of product you are carrying?
• How could your store differentiate itself from the competition?
• Do you want to be like your competitor, or do you want to strike out in a different direction?
• Does your product offering match your customers' likes?
• Do you know "exactly" who lives in your 30-mile area and who shops in your store?
• Is the population of your area young and of marrying age?
• What is your customers' average income?
• What is the profile of your store's customer?
• Do you have the "type" of customer you want?
• Have your customers asked you for gift registry?
• Have you done a customer survey?
Once you have answered all of the previous questions, the solutions will come easily, but you must also market your registry correctly to be effective. Ask yourself the following questions to ensure marketing success:
• How are you currently marketing your store?
• How can gift registry fit into this current marketing plan?
• How will you specifically promote the gift registry service?
• Does your store have its own unique personality, spirit?
• How does a customer see that spirit?
• Do you know what your "customer" wants?
• How do you plan to advertise your service?
• Have you created a cost analysis sheet for advertising, marketing, printing, design, and graphic costs?