Pelikan European Distribution Challenges

[Calabria]

I've recently returned from a short trip to Stuttgart and was deeply disappointed that THREE conventional office supplies and pen stores had closed (Steinmann, Haufler, Martz). This is where I used to get mid- to high-end pens such as Pelikan. Montblanc has opened its own lavish boutique, of course, but where would one now buy a Souverän? Lamy seems to be doing ok in department stores, but it makes me wonder how Pelikan is going to react to a changing retail environment. Any ideas?

[fplover01]

Brick and Mortar pen stores are becoming few and far between. School pens are readily available at various drug stores and discounters like Müller in Germany. Higher end pens are usually sold over the Internet these days. Brick and mortar stores cannot compete in terms of prices and flexibility. And the idea that a shop can survive selling only pens over the counter doesnt seem to work. Those that survive, usually have a very good internet platform for online sales. This is adjustment to the times. Trade is shifting more and more online.

 

If you go to a large department store like Kaufhof or Karstadt, there is usually a good selection of Pelikans, but at full price (well apart from special discounted items sometimes). I have not been recently in Stuttgart, but I was lately in Kaufhof in München and in Frankfurt and they carried the typical range of Souverän all the way up to M1000 (and many other pens from other brands), and a couple more rare special editions. But well, a M205 would cost 90-110 Euros there, but i can order one from Amazon in the 60-70 Euros range and have it at home the next day. In my medium sized city, there is a high end bookstore that has a good stock of pens including Pelikans, but prices are high.

 

I have about 10 Pelikans, I have bought only one in a B&M store, and it was the Kaufhof M605 (a very special offer) and that because it was not available at the online platform at the time. I am in my early 30s, so people who are younger, I think are more prone to just get online with their smartphone and order what they need than go to a physical store. Yes there is the advantage of seeing and handling the pen... but frankly more and more people are used to ordering stuff online, so this is really becoming less important over time. Unless someone isnt budget conscious at all and requires a full old fashioned shopping experience. I indulge sometimes when I buy a suit for example if I can afford it.

 

Montblanc has those boutiques but i dont think they make their money selling fountain pens... Montblanc is a luxury brand that sells prestige. They have a range of other Montblanc branded luxury items, which make the profit. The pen is just a trademark, to make you enter the store and buy something else. Pelikan doesnt have something similar to offer, since it is a brand focused on writing supplies, from school pens up to expensive fountain pens. So the two brands are just very different.

Edited July 25, 2015 by fplover01

[Calabria]

Thanks fplover01,

I'm nostalgic for the little store I bought my first M400 in, so there's that.

But I would never buy an item that is so dependent on craftsmanship and individual preference over the Internet, no

matter what the price break. I mean, pens are kind of like jeans, some fit and some don't and you have to try them on.

If I was Pelikan I would be thinking long and hard about how to maintain my brand values in the new environment.

[fplover01]

More or less everyone who has ever been in a little store is nostalgic about it. Our first memories are important to all of us. I was unhappy that the store my wife bought me my first Cross Century II is not any longer in existence. For Pelikan I dont have such memories, because my first Pelikan pen was bought online. Still my M605 is special to me, and even though I dont really need it (I have M800 pens) I am hesitant to let it go. I have to sell one pen at some point, trying to find excuses to sell another one than this.

 

But that doesnt change the reality, world changes, and if we dont embrace change and evolution, we are left behind. Younger people dont have those kind of memories and reservations. I went back to school a year ago to do a degree... For some of the younger folks, the problem is not writing with a fountain pen or with a ballpoint but whether putting things on paper has any meaning at all, or they are better off writing on their tablet (and more and more are doing it...).

 

i personally dont think that B&M stores with just stationary supplies have any long term future, without strong online sales. Montblanc is selling another product and not just a pen or writing supplies. Sure exposure in prime locations like high end department stores is very important to Pelikan too, but I think that most pens are likely to be sold onine nowadays than there.

Edited July 25, 2015 by fplover01

[amk]

Re what fplover01 says about MB not making money only from pens, I've noticed with airport MB boutiques (always worth a leisurely perusal if I have a couple of hours between flights) that there's less space given to pens now, particularly in the island display units, and more to accessories. Seems to be the way their business is going.

 

For what it's worth, Pelikan seems to understand internet business well, looking at their representation in the UK. Can't say whether that is the same for other European countries.

Edited July 25, 2015 by amk

[sargetalon]

This is the problem catering to a nice market. Those who can diversify do better but B&Ms that have a narrow focus just can't survive against online competition. Its sad that there are so few places to see and try pens before buying.

[Calabria]

More or less everyone who has ever been in a little store is nostalgic about it. Our first memories are important to all of us. I was unhappy that the store my wife bought me my first Cross Century II is not any longer in existence. For Pelikan I dont have such memories, because my first Pelikan pen was bought online. Still my M605 is special to me, and even though I dont really need it (I have M800 pens) I am hesitant to let it go. I have to sell one pen at some point, trying to find excuses to sell another one than this.

 

But that doesnt change the reality, world changes, and if we dont embrace change and evolution, we are left behind. Younger people dont have those kind of memories and reservations. I went back to school a year ago to do a degree... For some of the younger folks, the problem is not writing with a fountain pen or with a ballpoint but whether putting things on paper has any meaning at all, or they are better off writing on their tablet (and more and more are doing it...).

 

i personally dont think that B&M stores with just stationary supplies have any long term future, without strong online sales. Montblanc is selling another product and not just a pen or writing supplies. Sure exposure in prime locations like high end department stores is very important to Pelikan too, but I think that most pens are likely to be sold onine nowadays than there.

I guess I'm not a great believer in marching with the times. A fountain pen is an anachronism and my way of subverting the digital age. So I probably shouldn't be surprised that the infrastructure for analog writing is disappearing and that even MB is selling a virtual product, "prestige."

[VinnyCordeiro]

This is the problem catering to a nice market. Those who can diversify do better but B&Ms that have a narrow focus just can't survive against online competition. Its sad that there are so few places to see and try pens before buying.

 

And those that survives usually do that by also going online. Fountain Pen Hospital comes to mind.

[fplover01]

I guess I'm not a great believer in marching with the times. A fountain pen is an anachronism and my way of subverting the digital age. So I probably shouldn't be surprised that the infrastructure for analog writing is disappearing and that even MB is selling a virtual product, "prestige."

Well on a personal level we all have our soft spots... But a business needs to go with the times to survive. I have been recently following some articles about the future of department stores in Germany. Karstadt is struggling and the still profitable Kaufhof was just sold to Canadian investors who hope to unify the B&M and online shopping experience completely (Buy at store and have delivered at home, buy online and pick up at store, buy online and home delivery). And yes the experience and prestige is really important to lure clients to go to a B&M store, in an age where anything can be bought online, and there is or will shortly be a generation, for which this way of shopping is the norm, not an extension of the classic shopping experience but the norm). Another interesting read I had, people tend to order delivery food using various Apps on their phones, few people phone any more to order something.

 

I do think that analog writing as a skill will always have its place. But there are much cheaper ways to write than a 300 euros pen. Analog writing with a premium pen, that means different things to different people. For me it is important, for my wife for example is just a thing her husband does ("I tend to lose disposable ballpoints, i would lose the thing (fountainpen) in a day if u bought me one"). And yes Montblanc products in my opinion do reflect a prestige, which influences their prices and the exclusivity that surrounds them.

[Guy007]

Calabria & fplover01, you bring up some interesting points and this isn't just a European issue, but global.

 

I would hazard most people bought their first pen in a store, this is where they got to handle, sense the weight and balance and see if it was right for them.

 

Now if this was an M800, I have no need to go to a store for future pens of that size as I know it will "fit" - just like your Jeans once you have the brand and measurements.

 

B&M cost money to run, they are not able to compete on price generally with an operation with a digital store front and more of a warehouse storage. We use sites like FPN to determine who is reliable and who is not. Service is still important, but more so when there are issues with Pen i.e. nibs...

 

I personally am not a fan a brand that moves away from its original core competency. I would rather it focus and do something really well, unless those items were complimentary like cases, ink, paper, stationary et al.

 

In Canada we have the current problem with exchange. In the last year it costs me 30% more to buy from the states and 25% from the UK. So as a result I have cut back from internet purchases. Now if this also happens to store's who have to import pens, their fixed costs are the same, but if people aren't buying.... In Calgary we also have the issue of oil price affecting job's. And let's be truthful, these pens are a luxury. One pen is necessary, any more is a luxury.

Edited August 2, 2015 by Guy007

[SirVival]

In Germany there is really no risk involved with online purchases of unknown merchandise. By law anyone delivering goods by mail has to take them back within 14 days of purchase. If the value of the goods exceeds 40, they even have to cover return postage.

 

So you can order a million pens, see if you like them, and then send them all back without any loss of money. I am not saying that is the way to do it, but you can.

 

OTOH, I read somewhere that item returns are typically more than 50%, in fashion retail even close to 70% (order different sizes, send back those that don't fit).