Should Cross Go More Upscale?

[Mulrich]

Max, although the full report isn't provided (unless you want to pay the full whack of $1000!!), there is some very brief and tiny snippets of useful info here

 

http://www.businesswire.com/news/home/20170926006515/en/Luxury-Pen-Market---Growing-Emphasis-Corporate

 

Also here

http://www.findmarketresearch.org/2017/09/luxury-pens-market-to-see-incredible-growth-during-2016-2022/

 

To those outside the pen community, any pen over $50 is probably a luxury item. Cross is already listed in both articles as a luxury pen maker so I'm not sure these articles give evidence that cross should go more upscale. In fact, the article mentions corporate gifts which I think Cross has a good handle on already.

 

The second article also mentions Paradise Pen Company as a luxury pen company which doesn't help the main thesis of the articles.

[Bluey]

Thanks for the interesting articles. Found the second one especially relevant here, supporting going upscale might be the right direction for Cross.

 

Np

 

To those outside the pen community, any pen over $50 is probably a luxury item. Cross is already listed in both articles as a luxury pen maker so I'm not sure these articles give evidence that cross should go more upscale. In fact, the article mentions corporate gifts which I think Cross has a good handle on already.

 

The second article also mentions Paradise Pen Company as a luxury pen company which doesn't help the main thesis of the articles.

I'd never heard of Paradise Pen Co, but a quick check led to a company of the same name which had gone belly up earlier this year.

Well Cross are already in the luxury pen market. And the cheapskates market. I'm not really sure where they're aiming for and what their positioning is.

Edited September 30, 2017 by Bluey

[Mulrich]

Np

 

I'd never heard of Paradise Pen Co, but a quick check led to a company of the same name which had gone belly up earlier this year.

Well Cross are already in the luxury pen market. And the cheapskates market. I'm not really sure where they're aiming for and what their positioning is.

Paradise was a US pen retailer that went bankrupt and not a great example of the strength of the luxury pen industry. They were mentioned in the second article along with a few luxury pen makers.

 

Even though I don't have interest in Cross pens they have a pretty good position on the pen gift market. I don't think they get much accolades from pen folks (some but not tons) but corporate gift buyers aren't probably pen aficionados.

[Bluey]

not a great example of the strength of the luxury pen industry

 

Probably not, but there are quite a few who are so I wouldn't take them as the norm.

[pajaro]

I just bought a medium nib section for a Cross Solo I have. They can all go upscale. Caricatures of pens. Who will buy the Star Wars pens? Star Wars Groupies? Collectors?

[inkstainedruth]

You know, I'll argue the other direction just for the sake of arguing.

I think that if Cross tries to rebrand itself as a luxury pen they'll be competing against MB and Pelikan (and maybe some of the Japanese brands like Sailor --and they'll probably lose.

But if they develop a starter line (the way Pilot did with the Metropolitan/MR pens) they might be able to reel in a whole new generation of Millennials (and post-millennials) who think writing with a cool fountain pen is trendy and hipster. The Metropolitan Retro Pop colors are fun (although I mostly dislike the trim designs and wish they came without that but still have the fun colors), and the pens are inexpensive and well made. You can get them in blister packs at Staples, so they're easy to find; and hey, my brother-in-law's wife bought one, so they MUST be trendy!

I have a couple of Cross pens (both used). One is a bright red Solo with black trim. It's a pretty nice writer, but admittedly the ONLY reason I got it initially was because it came from a friend's estate (turned out it's made in Japan). The other is a Verve, which I gather was introduced with great fanfare -- but was only on the market for about four years because the design, while stylish, is not particularly ergonomic from the point of view of someone trying to actually *write* with it (and I had the inky fingers to prove it ). OTOH, it cost me a buck at a thrift store, and the B nib is actually decent.

Ruth Morrisson aka inkstainedruth

[max dog]

I just bought a medium nib section for a Cross Solo I have. They can all go upscale. Caricatures of pens. Who will buy the Star Wars pens? Star Wars Groupies? Collectors?

Saw an interview a little while ago with an owner of a large penshop in the US, and apparently the Cross Starwars pens were one of his best sellers. A nice high end pen with a Starwars theme will appeal to the Star Wars fans, and Cross appear to be capitalizing on that. They look a little juvenile for me, but I suppose the younger people who grew up with Star Wars action figures at McDonalds might like them. The blacked out Darth Vader Townsend might have possibilities for me if they modified it a little removing the Star Wars reference and made it as a blacked out stealth Townsend.

[max dog]

You know, I'll argue the other direction just for the sake of arguing.

I think that if Cross tries to rebrand itself as a luxury pen they'll be competing against MB and Pelikan (and maybe some of the Japanese brands like Sailor --and they'll probably lose.

 

I think you are right in the North American market. But in Asia Cross seems to be gaining traction as a luxury brand. On a trip to Korea and Taiwan last year, I saw Cross had a big presence in all the luxury pen stores. In one high end luxury department store in Taiwan, it was only Montblanc and Cross they were selling. I think in North America Cross has a lot of brand image rebuilding to do. Asia seems to be the market Cross is targeting these days to grow their market share in the luxury end competing with Montblanc. They have the "USA" brand working in their favor in Asia, even though manufacture is in China currently, but maybe not for long.

[max dog]

Paradise was a US pen retailer that went bankrupt and not a great example of the strength of the luxury pen industry. They were mentioned in the second article along with a few luxury pen makers.

 

Even though I don't have interest in Cross pens they have a pretty good position on the pen gift market. I don't think they get much accolades from pen folks (some but not tons) but corporate gift buyers aren't probably pen aficionados.

The trick will be for Cross to lose that "corporate gift" pen company image if they want to survive.

The intro of their higher end model "Peerless" with a nice Sailor nib is a step in the right direction. They even offer a zoom nib.

If they continue to gain big market share in Asia as a luxury brand, that momentum could help them in the NA market.

Bringing manufacture back to Rhode Island would win back a lot of fans to the brand in the US.

[max dog]

I've tried to like Cross pens, but have sold off every one that I purchased. I certainly won't be going back for more expensive versions of the same.

Have you seen the Peerless pens?

[Bluey]

But in Asia Cross seems to be gaining traction as a luxury brand.

 

You mentioned that Sailor make the nibs for at least 1 Cross pen. Perhaps this is why they chose a Japanese brand to make the nibs because they wanted to push into Asia, and what better way to make nibs for the Asian population than a Japanese nib maker. Their writing system prefers finer writing after all.

 

Perhaps MB is hoping to sell based on their brand name alone rather than adopting their nibs to the local population (this sounds like MB are not expecting their customers to write with it)

[max dog]

I think Cross is doing both right and wrong at the same time. While up market their top end line surely work , they have not made a judgement to properly position their entry to mid / mid high end of pens. Say their good old Classic Century and Centure II, or for the fact the Botanica. They consistently priced these significantly higher than like peers on the market and this is reflected in the fact that they routinely and regularly had to do sales and stock clearance.

You raise a good point. I think many of the "big" pen company's of the past need to take a hard look at themselves and decide if they want to be a BIC or a Montblanc, because it seems the days of catering to every price tier in the market does not work. That is why Cross, Waterman, Parker, Sheaffer are shadows of their former selves. The market in Japan is very different so the big 3 can cater to the broad spectrum of the market there because people use pens, cheap pens and expensive pens much more than in the west. I think the same is true for Germany, so Lamy, Faber Castell can offer low and higher end pens successfully.

 

For example, if you are in the market for a sub $40 fountain pen these days and choice is between a Parker Urban or TWSBI ECO, Cross Aventura or Jinhao 750 or 159. Which brand do you think would win out in these examples? I think the answer would be quite clear. Let the lower end brands who can offer better value have the lower end, and focus on the higher end market. There just isn't enough run way in the lower end, pen as a utilitarian implement market for company's like Cross to compete any more.

Edited September 30, 2017 by max dog

[max dog]

You mentioned that Sailor make the nibs for at least 1 Cross pen. Perhaps this is why they chose a Japanese brand to make the nibs because they wanted to push into Asia, and what better way to make nibs for the Asian population than a Japanese nib maker. Their writing system prefers finer writing after all.

 

Perhaps MB is hoping to sell based on their brand name alone rather than adopting their nibs to the local population (this sounds like MB are not expecting their customers to write with it)

Yes, I think a smart move by Cross. Cross has used Japanese nibs over the years on a number of their pens. Pilot nibs on their Century pens since the 80's as well as Verve and Solo models, which are considered as some of their best writers.

 

Perhaps MB might appeal as a signature pen, or their stubbish broads or obliques might be enough of a difference to attract some Asian buyers from a writing experience perspective. Similarly how western fountain pen aficionados like myself are attracted to the fine precise and flexy Japanese nibs.

Edited September 30, 2017 by max dog

[Bluey]

Could be. Maybe like a novelty value thing, but I would think that would be a little at odds with the status of a luxury pen.

[Mech-for-i]

As an Asian, I can testify to the fact that Cross do had some decent marketing here and trying ( if not that all successful ) to up market their product and their brand. That stated, Cross is not a new name here either and everyone sees it as a good if not exactly premium pen brand. The common notion is that Cross made great pens in their classic line but are not really that great up or down market. It would be hard for the market to accept paying 50% more all the way to almost double the price for a say 14K gold nib pen of like peers. which is what cross asking for in the market, this is pretty much the same for almost all the western brand. Waterman, Parker, etc and I am not talking about the top end price bracket, just the next step up market pen like the Platinum Century 3776, Pilot 74, or even Hero 100

 

The Asian market had one very fact that differs itself from the others, namely the market had its rather wide spectrum of pen mfr(s) itself and they do produce decent pens. So anything other than the top end premium luxury model, any pens from any European, or US Mfrs are facing competition that demand not just a name, but also of true writing performance and not hobby writing either. On that regard, the Cross and for the matter any mid range European or US pens are no better or worse than Japanese , Indian or Chinese and they are consistently priced at an disadvantage. Last time I check a Cross Botanica with just the steel nib would cost me more than buying a Platinum 3776 Century with a 14K nib, and the Platinum had more nib grind options too. I suppose the only selling point then is the aesthetics.

 

Going up market seems the obvious answer but how much space is left there ... I had to question that .. and what kind of offering can Cross ( or for that other brands too ) offers. When even past great names in this top end sector like St. Dupont, or Cartier are having their pens shuttered in sales; one have to wonder .. the point is up marketing is a strategy but how up market one want to go up market is something to ponder and while up marketing , how the mfr able to foster the name in their mid / non mass consumer mid range market would be a long term commitment that the brand need to made a judgement on.

Edited October 2, 2017 by Mech-for-i

[Ron Z]

Cross should get their act together before they try going anywhere else. Upscale hasn't worked out too well for a lot of pen makers. Conway Stewart made some great pens a decade or so ago, and decided to go upscale aiming for the limited edition market. How'd that work out?

[pajaro]

Saw an interview a little while ago with an owner of a large penshop in the US, and apparently the Cross Starwars pens were one of his best sellers. A nice high end pen with a Starwars theme will appeal to the Star Wars fans, and Cross appear to be capitalizing on that. They look a little juvenile for me, but I suppose the younger people who grew up with Star Wars action figures at McDonalds might like them. The blacked out Darth Vader Townsend might have possibilities for me if they modified it a little removing the Star Wars reference and made it as a blacked out stealth Townsend.

 

It reminds one of a movie one enjoyed. Dilly, Dilly!

[ian1964]

Lamy do both markets well and a lot inbetween.

[Uncial]

I said it before when they first came out and I'll repeat it again - Cross missed a trick when it came to the Star Wars pens and priced them far too high. They won exclusivity on the branding and franchising and they will have it for the next six years (and beyond) as the hype around Star Wars continues and builds and builds. It was any manufacturers dream. If they had pitched those pens at around €100 to €150 a shot, they would have flown off the shelves faster than the Millennium Falcon could jump to light speed. Everyone I know who's a fan of the films ooh'ed and aaah'ed over the pens (and they aren't even fountain pen users) then either yelped or laughed when they saw the price. A golden opportunity to hook in a whole new generation of fountain pen users who might come back and buy some of your other products, lost. 'Upscaling' does not always work and 'upscaling' within a franchise rarely works - people just feel like its a cash in. But I'm sure they must be feeling the squeeze in other ways. Quite a few of Montblanc's latest offerings over the last two or three years have more than an air of Cross design aspects and I guess MB feel they could give the company both a squeeze and a run for its money. I know who will win. It wouldn't surprise me at all if Cross end up scaling down into focusing most of their business into general stationary.

[inkstainedruth]

I said it before when they first came out and I'll repeat it again - Cross missed a trick when it came to the Star Wars pens and priced them far too high. They won exclusivity on the branding and franchising and they will have it for the next six years (and beyond) as the hype around Star Wars continues and builds and builds. It was any manufacturers dream. If they had pitched those pens at around €100 to €150 a shot, they would have flown off the shelves faster than the Millennium Falcon could jump to light speed. Everyone I know who's a fan of the films ooh'ed and aaah'ed over the pens (and they aren't even fountain pen users) then either yelped or laughed when they saw the price. A golden opportunity to hook in a whole new generation of fountain pen users who might come back and buy some of your other products, lost. 'Upscaling' does not always work and 'upscaling' within a franchise rarely works - people just feel like its a cash in. But I'm sure they must be feeling the squeeze in other ways. Quite a few of Montblanc's latest offerings over the last two or three years have more than an air of Cross design aspects and I guess MB feel they could give the company both a squeeze and a run for its money. I know who will win. It wouldn't surprise me at all if Cross end up scaling down into focusing most of their business into general stationary.

 

I suspect that in the case of the Star Wars pens, the merchandising fees were extremely high and they were trying to recoup their initial cash outlay. But I agree -- less expensive pens probably would have sold better and they could have sold a lot more of them....

Companies like MontBlanc and Krone may be able to get away with this. I doubt that Cross can over the long haul.

Ruth Morrisson aka inkstainedruth