The Stationers Guild

In a not too surprising development, it was announced yesterday that Shutterfly would acquire Tiny Prints for over $300 million in cash and stock.  The terms of the acquisition are somewhat complicated but not unusual in this type of acquisition in that institutional shareholders (read private equity firms) will not be allowed to sell their shares for 6 months and the managing partners of Tiny Prints who collectively own 12% will be locked in for 18 months.

What does this all mean?  Firstly, this is a great deal for the shareholders of Tiny Prints whose growth potential appears to have stalled as both Tiny Prints and Wedding Paper Divas are beginning to find it increasingly more difficult to differentiate themselves at the high end of the custom invitation and announcement market.  As long as the share price of Shutterfly doesn’t fall over the next 18 months, the Tiny Prints shareholders will be well compensated for their original investment.   I suspect that there will be a significant fall in the price of Shutterfly beginning in the fourth quarter as private equity firms jettison their shares.

Secondly, this is a very aggressive move by Shutterfly to diversify their sources of revenue and income.   Shutterfly operates at the low end of the market with an average sale of $32.88 in 2010 ($44.41 for the 4th quarter).    How will Tiny Prints’ strategy of paying over $50 in search marketing expenses to acquire a single sale resonate with Shutterfly’s Walmart and Target marketing focus?  Clearly, there are advantages to help smooth out the seasonality of  Shutterfly’s business with the addition of Tiny Prints’ baby and wedding business, but is it enough to offset the fact that over 50% of Shutterfly’s revenues occur in the fourth quarter.    Personally, I suspect that Tiny Print’s product offerings will diminish in quality and price (they were already moving in that direction) rather than lift the quality of Shuttefly’s overall product offering which is firmly entrenched at the lower end of the market.

Thirdly, what does this say for the wedding invitation and baby announcement business as a whole?  As readers of the Stationers Guild are aware, this is just another step in a consolidation process to protect margins at the lower end of the market.   It is a question of rationalizing cost structures to compete in the mass-market.   There is no end of competition in this market segment.  For instance, Paper Culture has immediately jumped into this marketing milieu by promoting its environmental qualifications when compared to Shutterfly and Tiny Prints.   How reassuring it is to know that Paper Culture is planting a tree for every order that they receive.  Does this make Paper Culture green?  The co-founder and CEO of  Paper Culture is Christopher Wu, whose background is in technology.  With  jobs at Yahoo, Microsoft and HP, Mr. Wu doesn’t strike me as one who is a spokesperson for either the stationery industry or the environment.    Are consumers just being played?  You be the judge.

If you are confused, you should be.  There is a lot going on in cyberspace as online marketing heavy-weights compete for visibility.   The hype has reached outrageous proportions and only reconfirms what Eric Schmidt, the former CEO of Google, said about the internet:  It is a “cesspool” of misinformation.  For those of us who value the craftsmanship that goes into making fine paper,design and custom printing, we are witnessing the digital footprint of the barbarians reducing a proud industry to recycled scrap paper.  Personally, I don’t think the consumer will be so easily conned and the only way these online behemoths will able to compete is on price.  This is a sure recipe for disaster.

Well done Tiny Prints.  You got out at the right time.  Hopefully Shutterfly won’t collapse until you have had an opportunity to sell your shares.

As I have reported many times, internet search results are often manipulated by very smart people to the detriment of the consumer and visitors who are looking for information rather than a sales pitch.   As most of you are no doubt aware, Google and most other major search engines segregate their page listings into two areas:  paid search and organic search.  For instance, if you are searching for ”wedding invitations” using the Google search bar, the results page will look something like this:

The search for “wedding invitations” returns more than 14 million pages which Google has found which contains information relevant to wedding invitations.  The three lead paid search results bracketed in RED are paid ads where companies bid for the top placement.  In this particular case, Wedding Paper Divas, bid more than Normans Printery (whoever that is) and Google places them in the top position because of that fact.  Immediately below the top three paid listings are the ORGANIC listings.  These listings are derived from a proprietary algorithm  developed by Google to determine the most relevant websites for that search term, independent of any paid advertising.    They use over 100 factors in determining that ORGANIC relevancy, include key word density, title bars, backlinks from other websites and many other factors.

While the companies on the first page of Google for paid and organic search results can often be radically different, in this particular case Wedding Paper Divas also occupies the Number 1 position in ORGANIC search as highlighted in GREEN.   Why is this important?  Simply stated, the first listing in ORGANIC search will attract somewhere between 36% to 45% of clicks, almost twice the percentage of the next organic listing.   In other words, it pays to the be the number one organic listing for key search terms.   For that reason, many businesses will do most anything to obtain that coveted ranking:  It is big dollars!

In a fascinating article that appeared in the New York Times on Sunday entitled The Dirty Little Secrets of Search, NYT’s investigative reporters discovered that J.C. Penney’s had used “black hat” SEO (search engine optimization) tactics to grab the number one organic listing for key product search terms.  When the information was reported to Google, who conducted their own investigation, J.C. Penney was manually stripped of its number one listing and its search relevancy signficantly altered (in some cases falling to as low as 77 (seventh page of search results).   All this for a company that was listed number 16 of the most influential 500 internet retailers.

While J.C. Penney’s has now fired the SEO firm that was responsible for these questionable marketing strategies, I suspect that its reputation will be permanently damaged by this revelation.  Nevertheless, it raises a number of question for firms that are practicing similar strategies.   The wedding industry in particular is ripe for “black hat” marketing.   For local retailers, it is absolutely imperative that you do everything legitimately possible to boost your online presence.  Google and other search engines try to list “local” providers if they believe that qualified local suppliers exist.  There are a number of simple and inexpensive ways to do so.  Don’t let online marketing companies destroy the stationery industry.

Consumers are waking up to the fact of the deceitful practices of many internet marketing companies.  Congratulations to Google for taking the high road and acting promptly to safeguard the integrity of their search algorithm.

Richard W. May
Thérèse Saint Clair

I was drawn to a recent article in Stationery Trends Magazine by editor Sarah Schwartz soliciting ideas from magazine subscribers on ideas to keep stationery relevant.   This is a topic that has preoccupied me for several years and I have written about it extensively on the Stationers Guild Blog.   While many fine suggestions and ideas surfaced in the article, I consider most of the suggestions to be wishful thinking with little coherent basis for taking collective action to save the stationery industry.  This may seem a bit harsh, but stationery will continue to fade into oblivion until we honestly face the enemy and take action. 

The enemy is apathy, indifference, getting mad rather than taking action, and the widespread belief that somehow people will eventually see the benefit of written correspondence.   I am reminded by that bumper sticker, “Don’t get mad, get even!”  To do so, each and everyone of us who has a stake in the stationery industry should step up to the plate and take action (sorry for the baseball analogy).  The time for wringing our hands is over.  The time for celebrating bad taste and shoddy designs is over.  The time for tolerating bad etiquette is over.   It’s in our hands to change the industry if we act responsibly and take decisive action.  Waiting for someone else to take the lead is simply wishful thinking.

When I say that the enemy is apathy, what do I mean?  Apathy is a storefront owner  who does not have a website, a Facebook and a Twitter account and does not post blog articles at least three times a week.  Apathy is a storefront owner who still advertises in the Yellow Pages.  Apathy is a storefront owner who has not claimed their business on Google, Yahoo and Bing.  Apathy is a storefront owner with a website who has not asked for advice on how to optimize their site for local search.  Apathy is a storefront owner who does not insist that all vendors whose lines they represent should have an affiliate program.   I could go on, but unless store owners are willing to quickly engage in Internet marketing, the battle is largely lost. 

Vendors too are running scared and, indeed, the stakes couldn’t be higher.  The Stationers Guild has long argued that once the “experienced” storefront stationer disappears there will be no one left to explain their products and the ultimate battle for brand awareness will be determined by price.  Brand awareness on the Internet is determined by advertising – not the slick ad in Martha Stewart Weddings, but by thousands of independent bloggers, social media experts and affiliate websites that have been created solely for the purpose of earning “click revenue”  for directing uninformed consumers to an online website.  How ironic is it that Wedding Paper Divas is “Numero Uno” for “wedding invitations” and they don’t even print a scrap of paper.  Not only that, many of our own vendors sell to Wedding Paper Divas and FineStationery.com simply out of fear that they may be missing market share.   There is one sure economic fact:  Unlimited supply of product distributed through unlimited distribution channels will certainly destroy the industry.

Unless leaders in the industry take clear and compelling action on how they intend to distribute their product, the battle is lost.  This is one case where you can’t “have your cake and eat it too.”  Similarly, storefront dealers must engage the Internet and develop an alternative voice to the insipid sales pitches from online retailers and their parasitic mouth-pieces.  All is not lost, but it soon will be unless we decide to make this battle personal. 

Richard W. May
Founding Member Stationers Guild

As readers of the Stationers Guild News are aware, I have long pointed out the hazards of trying to find “cheap wedding invitations” online.  It is not that they are not available.  In fact, there are over 14 million search results when you enter the search term “cheap wedding invitations” in the Google search bar.  What I am referring to is the self-serving and deceptive techniques used by many vendors to attract unsuspecting visitors to their website.  These deceptive advertising practices are undermining the credibility of online search and, in my opinion, fradulently promote websites and products under the guise of advice. 

Today, I came across a Blog posting from Wedding Layers offering advice on how to find cheap wedding invitations.   The text of the article was lifted from an Ezine article written by Kim Lapp and contains eleven embedded links to the website of  Tiny Prints which just happens to sell wedding invitations (no other vendor sites are listed) .  The issue is not that one should not offer genuine advice on “wedding invitations,” but to shamelessly promote another website under the pretext that you are offering the consumer meaningful  information as a “detached” expert is a sham.

I have no difficultly with self-promotion if it is labeled as such, but “advice” and “news” and “recommendations” that are clearly self-promotional and not properly disclosed as such are an insult to the consumer and may, in fact, be illegal under recent Federal Trade Commission (“FTC”)  guidelines.  Tiny Prints and its sister company, Wedding Paper Divas are experts at self-promotion.  Buyers beware, you may not be receiving objective advice!

Richard W. May
Therese Saint Clair

The first quarter of 2010 will determine wedding invitation trends for the year.   In fact, I suspect that wedding invitation designs have pretty much been defined long before the “Will you marry me?” question was asked this holiday season.  I have it on very good authority that this is so:  Google.

Google Trends tracks the number of web daily searches for a particular term (in this case “wedding invitations”) over the course of a year.  As the chart above demonstrates, searches for “wedding invitations” peak toward the end of the year and early January and then begin to tail-off rather significantly after the first quarter.  The chart above also compares the search term “online wedding invitations” (shown in red) to “wedding invitations” (shown in blue).   As suggested by the chart, prospective bridal couples do not feel the need to distinguish between wedding invitations sold online and those that are offered exclusively through storefront stationers.

The New York Times (December 29, 2009) reports that bridal magazine ad pages are down significantly in December, 2009.   Quoting sources the Nielsen Company and Mediaweek, bridal magazine ads for December, 2009 were down 8.4% in Brides magazine, 25.5% in Bridal Guide and 23.9% in Martha Stewart Weddings.   While ad pages are booked far in advance and certainly reflect the rather depressed economy, the battlefield for wedding invitations has shifted to the Internet and the public is indeed poorer as a result.    As I have written on numerous occasions, low image resolutions, limited customization options and the inability of the online client to compare different papers and printing processes greatly diminishes a company’s ability to distinguish their brand.

It is interesting to note, that of the top 10 companies listed on the first page of Google for the search term “wedding invitations,” only one is a credible printing company:  Crane & Co.  Not surprisingly, Wedding Paper Divas, remains in the top position.    It does so because it has the most aggressive and intelligent application of paid search and Search Engine Optimization (SEO) strategies of any company in the business.   In a revealing New York Times article, Tiny Prints (a sister company of Wedding Paper Divas), describes how it competes for holiday greeting cards and photo cards by paying up to $50 to acquire a client.   I would suspect that they will pay that and possibly more to acquire a client willing to purchase a wedding invitation online.

While Wedding Paper Divas has certainly upgraded its line in recent years with companies such as William Arthur merchandizing their line through them, one wonders whether this business model is sustainable.    In fact, William Arthur now sells directly online and other companies such as Minted offer a wider range of quality invitations from craftspeople who do not generally market their equisite designs online.

For those seeking quality wedding invitations coupled with superior customer service, I strongly recommend that you visit a stationer in your neighborhood.    Most of these stores carry a far wider range of wedding invitation samples than any online dealer.  Customization options are limitless and you can actually feel the paper samples and see how ink colors change depending on the printing process.  In 2010, do yourself a favor and see why choosing your invitation in person makes all the difference in the world.