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Posted Date: 01/4/2016

Multigenerational Appeal of Modern Collectibles

Hope Winsborough, Contributing Editor

The 2016 holiday collectibles market presents both exciting new products and thorny challenges to vendors, retailers and distributors alike. For a nuanced, up-to-date understanding of this segment, consider the case of Department 56, based in Eden Prairie, Minn., which perfectly illustrates the jagged recent history of Christmas collectibles:

Founded in 1976, the brand known for its keepsake miniature holiday villages was listed on the NYSE during its ’90s heyday, with flagship locations in destinations such as the Mall of America and Las Vegas. Then came a perfect storm of setbacks: First, customers cut back on collecting during the early 2000s. The 2005 acquisition of giftware/china brand Lenox increased the company’s debt burden, and led to its 2008 bankruptcy. By the time it was acquired by Enesco a couple years later, the recession had hit and the housing slowdown had taken a serious toll. In November 2015 Enesco was acquired by Balmoral Funds, a Los Angeles-based private equity fund focused on partnering with talented and committed management teams in the mid-market.

Today the venerable brand, which is celebrating its 40th anniversary in 2016, is enjoying a second act, while betting heavily that its heirloom collections continue to resonate. Today, Department 56 has collectors clubs in every major city, a national umbrella group that runs an annual convention, and sales growth of 7 to 11 percent annually. Maintaining relevancy has required making major changes, from cutting staff to taking on new licenses such as Disney’s Frozen and PBS-TV’s hit series Downton Abbey, plus using social media to promote product launches.

Another factor, says the company’s collector liaison Melinda Seegers, is catering to newer collectors. “More people from younger generations are nesting now,” she explains, “and they want to start their own traditions.”

Bethany Lowe, president and creative director of her eponymous collectibles brand, agrees. That’s why, she explains, when collectibles went out of vogue about eight to10 years ago, she wasn’t disheartened.

“I never bought into that collect-as-much-as-you-can mentality anyway,” she explains. “People should be buying because they love something and want to hand it down to their kids.” In her experience, “It’s about building tradition within families not about volume,” Lowe says. “It used to be that with collectibles — something like Precious Mo­ments — that everything looked the same. Now what works is actually the opposite. People want something that’s uniquely different.”

Kurt Adler has also noted the changes in the collectible market, mostly those due to younger generations being today’s collectors and consumers. “Older collectibles were painstakingly hand-made, and this appealed to past collectors,” Melanie Velez, marketing manager & accounts specialist, reveals. “Millennials, on the other hand, seem to be less interested in hand-crafted pieces, and are mainly concerned with finding pieces that are relevant to them.”

Velez notes that demand for nutcrackers and glass ornaments is increasing, but within different collections. Past generations of collectors were more interested in the company’s glass Polonaise ornaments, hand-crafted in Poland by artisans, and Steinbach nutcrackers, also hand-made. Today, interest is rising in the glass Noble Gems collection and Hollywood Nutcrackers, which both feature designs heavily influenced by today’s trends and are much less expensive, since they are manufactured in China.

Less Is Now More
It’s a change that dovetails with changing demographics. Most Millennials (born between 1980 and 2000) tend to have smaller dwellings and lead more itinerant lives. “Consumers are more limited in space, so they’re more discriminatory. There’s no excess. They come in and buy two or three things” — a change that Velez sees as inspirational. “It leaves you free to create new stuff that appeals to both longstanding customers and new consumers,” she says.

While previous generations of collectors preferred smaller, tabletop pieces, Lowe finds younger customers are looking for large, unique “heirloom” items. “Large statement pieces are harder to find,” she says. “Ours have limited production and sell out every year.” Two of the company’s top sellers in 2015 are outsized in comparison to traditional collectibles: the painted tin Merry Marquis sign and Paper Mache Ornamental Snowman, a 22-inch piece based on an old postcard image.

For 2016, the company is introducing 25 pieces with multigenerational appeal, including a new addition to its Vintage collection — “The Night Before Christmas,” based on Saturday Evening Post artwork and images. “Our designers are younger and they’re all excited about it — a cool, modern twist on something vintage,” she notes. “They see it and recognize it, and then they want more.”

The multigenerational popularity of retro-cool collectibles also applies to retailers. At Cleveland’s A Christmas Story House and Museum gift shop, sales were up for 2015, according to executive director Steve Siedlecki. In particular, there was distinct growth in Department 56’s A Christmas Story Leg Lamp ornaments and in both Thomas Kinkade and A Christmas Story puzzles.

The 3,500-square-foot gift shop carries a range of collectibles including Department 56 villages, its A Christmas Story line (including the Leg Lamp items), Thomas Kinkade, Hallmark’s Christmas Vacation, and other movie-related SKUs such as bunny jammies, Red Ryder air rifles, Lifebuoy soap, DVDs, and books.

Celebrating Experiences
For Millennials, who value experiences over stuff, A Christmas Story products also function as team swag or souvenirs — signifying a consumer’s attachment to the movie, to visiting the museum or to museum-sponsored activities such as the annual A Christmas Story Run fundraiser. These same customers also value immediate gratification, says Siedlecki, so knowing what the competition is up to, whether it be by checking price or online reviews, is crucial.

The interactivity of social media venues such as smartphone apps, Facebook, and Twitter is key to catering to younger markets. “It adds to the experience, so it appeals to the generation.”

The Internet has had a profound effect upon collectors of all ages, says Department 56’s Seegers. “They can talk to each other and display items on YouTube. Their world is a lot smaller now.” For Department 56, it’s also fueled new life into brick-and-mortar establishments.

“We lost accounts during the downturn, since several retailers went out of business,” she explains. Many collectors who had to scramble to find products now place orders online that are shipped to them via the closest store — which typically brings them into the network of physical, mom-and-pop stores.

In the best-case scenario, knowledgeable retailers unite the worlds of online vendors, artisans, brands and consumers. At City Lights Collectibles, a 27,000-square-foot operation in San Diego, online sales are catching up to onsite sales, despite a dearth of collectibles lines in the marketplace.

While lines like Department 56 and Christopher Radko have a long life, says owner Brian Young, there have been no new collectibles coming in to fill the gaps since the downturn, which translates in his view into a decline in artistry. “There aren’t as many in-house designers, for example.” City Lights has adjusted by expanding product mix. “We buy wider now, but not necessarily deeper.”

City Lights also hosts open houses featuring name artists with multi-generational appeal. “It’s a big expense for us, but it brings people into the store — especially dormant customers who haven’t been in for a while,” he notes. The operation also invests heavily in staff training, with longtime veterans indoctrinating younger employees in everything from manners to dress code.

From Young’s perspective, generational differences don’t matter as much as lineage — he finds collectors inherit the penchant for certain keepsakes. “Most are carrying on from where their parents were,” he explains. “I don’t encounter many younger collectors whose parents weren’t already invested.” 

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