Scale & Scope
Recognizing where the company’s strengths lie, Acorn outsources its creative and fulfillment operations. Notes Penella, it’s important to know what you’re good at, and then let a professional do the rest. Marron and her buyers work directly with an outsourced creative director and copywriters to ensure each product in the catalog speaks to the core Acorn consumer.
* Escalating business costs. Penella points to, for example, increasing freight costs, as well as the impending postage and paper rate hikes, as concerns for most catalogers. At this stage of growth for Acorn, however, some things are getting easier, he notes.
“Economies of scale are starting to kick in as the business grows,” says Penella. “And the business is big enough that some things are starting to become cheaper.”
As the catalog’s circulation has grown, for instance, the fixed cost per catalog has dropped dramatically. Whereas in 2001, the cost to produce and mail each catalog was 80 cents, now it’s closer to 50 cents per catalog, notes Penella.
* Spinoffs. Acorn isn’t content to remain static. For instance, it’s considering spinning off a video- or gift-only catalog, a decision fueled by the continued success of both categories, says Penella.
* E-commerce. Growing the Web site has been a challenge since Acorn began redefining its product mix. Although 20 percent of sales come in via the Web, the site has only recently caught up with the changes made in the catalog. Continuing to keep the site and the catalog in sync is an ongoing exercise, notes Penella.
Each of these challenges is indicative of the attitude embodied by Acorn. Not content to rest on its laurels, Acorn continues to focus on growth — on improving both its scale and scope.
Acorn Direct’s Timeline
1984 - Atlas Video is founded by Peter Edwards, a communications consultant working primarily in the cable TV industry.