This feature first appeared in the October 2011 issue of Marketing magazine. 

It’s a brand story of risk, reward, success and going your own way. And Sean Greaney is inspired.

It’s pitch dark. I roll over and extend my searching fingers over the cotton sheets, the flannel cover, down to the cold lacquered floorboards, finally reaching the touch of felt I am seeking. I unclip the clasp, unscrew the pen, smiling in knowledge but not sight of its provincial yellow colour, and scrawl this introduction. This is how it happens for me, sometimes. Tomorrow I will agonise over what the hieroglyphs and elongated lettering mean, but at this moment I’ll feel I’ve written the most brilliant and incisive paragraph.

We write up some very exciting brands and interview some incredibly intelligent people. Sometimes I brag at lunch about who these might be in the coming issues. Normally it elicits some excitement, envy or begging for contact details. I’ve never seen it cause my lunch partner to leap up, knock her chair to the ground, her drink over the table and squeal, “I love them, I love them, I love them!” Keep in mind that day I was sharing lunch with the trade marketing manager of a major Australian B2B company.

So when I say there is an entire subculture of stationery freaks the emphasis is on the noun. The right stationery can make the least accomplished waffler at least feel she’s F Scott Fitzgerald material. Luxury stationery fulfills the silly frustration writers have at no tools to upgrade to; no badge purchases to announce to the world what they are. And while I concede to doubts that any masterpieces are written with Mont Blancs on vellum, that there aren’t inspiratory advantages between a Bic and its expensive brothers, rationality has so little to do with purchasing behaviour.

And on rationality, if Kristina Karlsson had followed a rational hierarchy of prioritisation in beginning her home business she’d perhaps have never begun the race.

 

First things first

Karlsson was setting up her home office and wanted the correct, inspiring environment. She made a trip to purchase the necessary items. Having grown up in design-centric Sweden, Karlsson wanted beautiful pieces. They weren’t available.

Partner and CEO, Paul Lacy tells me it was 12 years ago she came home and announced, “I know exactly what I am going to do with my life! Open beautiful stationery boutiques around the world!”

He thought it was a fantastic idea, but his main concern was it was one idea among many. Lacy, a trained marketer, was on the rational thought train, thinking this means: designing a range, getting it made, obtaining start-up capital, warehousing, distribution, wait – have you ever run a store before? A couple of months down the line, however, Lacy was more than what the word supportive can express. He was selling his house to produce the start-up capital!“At that point in time, I was completely sold. Kristina had just shown amazing tenacity and get-up-and-go in getting this off the ground: getting ranges designed, running focus group that were like research meets trunk-show parties. She was wholesaling to people, had good-quality design stores [stocking product]. I was a complete convert and we dragged out a blank sheet of paper to design what we had always planned to be a global brand from scratch. So when it came down to, ‘How are we going to fund this?’, well, Kristina… she’s fairly persuasive.”

“And I never take no for an answer.”

“And it was actually a pretty easy decision, to be honest. And shortly after that, the planes flew into those buildings in New York and it caused us to kind of pause and question. I remember, probably like many other people around [the world], I felt kind of off-kilter, off-balance, and wondered what it meant for world order, what it meant for everybody really, let alone somebody who just sold everything he had to run with a dream. I reckon maybe half a day of contemplation and we just got back to, no, this is sound, it feels great. We were both just buzzed on it and we went with it.

“We had friends who said you guys are crazy, what are you doing? A mate of mine pulled me aside and said, ‘Mate, what are you doing? This is stationery! What are you doing?’ But we were set, and we probably never faultered, Sean, I reckon from then.”

This brand inspires passion – drink spilling, cafe faux-pas inducing passion. And those brands tend to be borne of their founders passion for a product, cause, service. Karlsson believes her love of her product stems from her childhood in Sweden and the memory of going back to school, purchasing “new notebooks, fresh pencils, erasers that smelled nice.” Since starting the business her obsession has grown, but she finds it difficult getting normals – non-stationery freaks – to understand this passion. “Some people think I’m completely a freak, but I get extremely excited about small things, and the whole office goes crazy when we get our new samples in and when we decide on something innovative. It’s something I just have, I think.”

And that’s why, 13 years ago when Karlsson arrived in Australia, the price-driven “99c lever-arch” was so grating. To Karlsson’s passion, Lacy brought thorough planning. Thorough. The couple say it probably created a healthy tension between Do and Plan in the early days, with Lacy admitting he probably spent far too much time on planning and marketing strategy. Of course, every dollar had to work hard and there weren’t many, so they turned to that great and difficult dice-roll: PR.

“There is a lot of emotion in stationery for consumers. Whether it’s about the fresh school year… the need to be organised, the power and freedom you feel when you’ve got clarity and order,” says Lacy. “They’re fairly powerful emotions in there, so it’s really fun to play with a brand in that space because there is so much emotion to tap into.”

Having opened the Yellow Pages, turned to S for Stationery and fumbled through getting the range made, Lacy suggested she now head off to Sydney and speak with the magazines, show them the range, explain the story and perhaps ask for advice.

“It’s funny, because when Paul suggested me doing that I almost had a heart attack. Just the thought of it, because fashion and homewares editors [for someone of my age at the time were] really kind of intimidating because I didn’t know anything about that industry, but I just know that it was a very exciting industry to be in. And English is my second language, which didn’t help. So I was always nervous that I didn’t understand it or that I would say the wrong thing. But it was amazing how they were. I met some of the editors of the big magazines, but also some of the stylists and journalists and it was amazing the kind of interest it created.”

Karlsson puts their attitude and interest down to product and angle. In a price-driven category, here was something designed. And a young woman, immigrant no less, was driving innovation in that category. You don’t need much more for a feature. PR is the golden chalice for SMEs – free, high credibility, WOM-creating promotion. But it isn’t that easy.

You can always detect that hint of apology when you take a call, “Just following up on that press release I sent you yesterday.” Invariably it’s the press release about that cotton-bud brand’s packaging alteration that requires a follow up, because if it were exciting we’d already have written about it! I ignore hundreds of calls annually, and I’m frequently complimented for being “one of the polite ones!” So when you haven’t got an agency to make those frustrating follow ups, cop the flack the day the journalist is going to print, the office is out of coffee, their car broke down and is sniveling through the cold they haven’t been able to shake all Winter, what do you do?

“It’s one thing to actually have the product or the concept, but we fairly quickly understood [we should view] them as consumers. And they had a need… they’re busy, they need news, they need fresh news to deliver to their readers to sell magazines, so they can sell advertising, subscriptions and all that sort of thing. What can we do to make it easy? We certainly put a lot of energy into getting good photography, writing good press releases they could pick up and run with. Kind of serving their needs by serving up information and images and we have such a constant flow of new product. We’ve got new product in stores every three weeks – in the early days, probably not so frequent. But whenever we had something new, we shared the news and in a way that made it kind of easy for them to pick up. Some of the lazier ones would just run with our words and some would dig a bit deeper and find a story between the lines. But it was really, I guess, applying marketing thought to say, what do the magazine people need? How can we help them? My advice to people is just to think about them as consumers… Have something interesting, but understand what they need and serve their needs, be courteous, say thank you, the stuff that I’d kind of think of as common sense.”

 

Growing Up

The passion wasn’t only for stationery, but also retail. Karlsson’s dream always encompassed bricks and mortar locations – remembering of course this was before ecommerce was a reality for most brands or even a concept to customers. With such tactile product and an emotional brand, the physical stores are an integral touchpoint and subtle part of the brand experience. The environment and experience of a kikki.K store’s footprint impacts digital sales as well.

“Our online business has grown really strong, and strongest in the areas where we have a bricks and mortar footprint,” says Lacy. “So I’ve got a theory, I don’t have the hard data to back it up, but I’ve got a theory that people connect with the brand and they know our stores and then they’re kind of touched and close to it.”

He believes this connection to the brand encourages online purchasing and I’d argue it demonstrates the need for strong brand experiences in-store to overcome the impersonality and dehumanising aspect to digital shopping carts. “We hope it resonates in a design sense, the experience and the simplicity, hopefully, of the way that it doesn’t take too many clicks to get what you need, and you can get questions answered easily and things like that… It would be interesting going into a new market where there weren’t any physical stores [as a test].”

It is a concern I raise regularly with brands – maintaining the brand connection through ecommerce. And when Lacy explains how kikki.K has achieved this, I have to inelegantly and quietly get up off the floor so as not to be heard over the line!

“Everybody that buys online from us gets a note saying thanks and hope you love your stationery products.”Wow.And an aside. To get ecommerce running, Karlsson again turned to Lacy and borrowed money. When paying him back three or four years ago, did so in true game show style with a giant novelty cheque!“We were actually really terrible at wholesale, because it was someone else’s business [we weren’t good at making sure we got premium positioning] and we found it frustrating.

But it was really always about the shops: we knew how they would look, they would be colour blocked. No one else was doing that, it was just kind of part of the DNA of what we were building,” says Lacy.

“You’re also so nervous in the early days and I used to be so scared,” adds Karlsson. “[The buyers] were very tough. I just wanted to sell them a bit of a product and I wasn’t so money driven, the way that they were very money driven.”

“It’s just so nice to control your own environment, and you’re close to your customers,” continues Lacy. “You just feel like you’ve got such close understanding of what you’re doing. You get feedback. People pick up your products, they talk about it, you see how they react to them, they give you money and say thank you. We learned to be a retailer, we didn’t really know much about retail when we put our shingle up, but we learned to be a retailer. And once kikki.K had its own stores, they went about rectifying their display issues. Visual merchandising is a core promotional element and anyone whose a fan or even visited the stores would cite the ‘feel’ or design as a major impact. The brand’s first store – third floor of a centre that was, according to Lacy, at the time dying, Melbourne Central – even took out an award.

“The original one was in such a bad location,” admits Lacy. “It was when Daimaru moved out, and we got a great rent deal. We were nearly a flash in the pan. We were very wet behind the ears. If we had have believed the leasing guy and paid what he was asking, we probably would have been in and out of business within six months, but fortunately, someone subleased their store to us and really looked after us. We were quite green and passionate and they gave us a reasonable deal in what really was a terrible location. But shortly after opening, we won an award for being Melbourne’s most innovative retail concept from the Lord Mayor, and publicity around that drove people to a really second-rate location.“But also visual merchandising plays a big part in our products. We design it so they all work together, and it’s mix and match, and it’s colour coordinated. To sell it to a retailer that’s not your own, you lose control unless you do a really tight contract, but in the early days, it was just gauge their reaction and sell some products and that was the purpose. Retail was a dream.”

That dream has always encompassed a store in Karlsson’s favourite cities. And why not? A brand built on passion should have strategy based in it too. kikki.K’s mission, of course, being: something kikki.K in every stylish life. So the grand plan involves Copenhagen, Paris, London, New York, Tokyo locations, “Shanghai, perhaps. The dream is big!”

Despite the original location’s shortcomings, location has been key in this brand’s success. kikki.K is fashion stationery. It’s designed to go with your outfit and therefore has an element of seasonality.

“Fashion is where we like to be. Which was quite interesting in the early days trying to convince landlords that that was a good idea. They had it in their heads that stationery is a functional item, and then they thought we should be near homewares. For quite a while we’ve been working on the ‘We’re a fashion business’, so we talk about ourselves as being fashion stationery. And we’re very much a fashion accessory. We have a leather bag range now, which is very much in the fashion accessory space,” says Lacy. “People are buying our products as fashion, to match the shoes bought, the outfit that they’ve got for the season, or a diary in the tone that’s going to look good with whatever they’re wearing for the whole year. So we’ve always worked hard and it’s taken a fair bit of convincing with some landlords to agree to us being in fashion precincts, but we’re kind of closer now to them all understanding. I was up in Hong Kong recently, and there I’m back to square one of that challenge – but we’re getting there. It works best in the fashion area – the fashion areas are the most visited parts of the malls by our consumers.”

This is something that follows into staff-education. As part of my tax-deductible research I had decided I should experience the brand, hence the felt notepad and sunny pen. A charming young lady in the South Melbourne store guided my purchases expertly, asking me about my profession, my personality and suggesting grey felt went with my fashion sense (clearly not an afternoon I was wearing my now-infamous orange pants).With this fashion vein running through the brand, surely the extensions are obvious and all too tempting? I put this to Karlsson and Lacy, who mention feedback has suggested homewares or lifestyle fashion. But they’re most excited by Create by kikki.K: digitally customisable products.

“Things like the memory book we talked about as an example, for Dad for Father’s Day. You could come into our store and buy the little one and fill it in yourself and cut and paste pictures into it, or you can join online and create it entirely online, in the way that you see photo books and things being made by other businesses. We expect that is going to provide people with the convenience of being able to do it online. We think that’s a strong category, and really just moving with what is a really strong trend to digital products. So, I think a lot of our product translates quite well.” Currently these will be online-only purchases, but Lacy is excited to offer in-store pickup eventually.

The duality of rational planner and passionate creative is all too easy a juxtaposition for a writer – though these two do somewhat fit the mould – as any marketer knows, a creative bent is necessary to your work. But working by intuition is simultaneously, inspiring, invigorating and terrifying. So beyond the passionate, sleepless start-up phase, I wonder how the brand justifies its marketing decisions a decade down the road. Focus groups? “Is it Henry Ford who said that if he’d listen to the customers, he would have done faster horses instead of the car,” ratifies Karlsson, saying that a number of new people with marketing degrees come into the business wanting to begin focus-group driven research. And I do empathise – if your instincts have led you to 62 stores in a decade, who can look you in the eye and tell you you’re doing it wrong?“You sometimes just want to use your own instincts, but in saying that, we do have an intranet where if you come into our store and you ask for something that we don’t have, that will be sent into the intranet saying ‘Sean was in today, he needed a USB pocket,’ or something and then that will go to the intranet and all the product team would read that, including me, and we’re getting loads of ideas for our customers. So, in some ways we do it, but we don’t do it in the way that traditionally is done. But it’s on the list that some people want to do, so maybe we need to do it.”

“I’m one of those people with a marketing degree I reckon Kristina’s referring to. I’ve just been here thinking just breathe in!” responds Lacy. “There’s been a lot just driven by intuition, and it comes mainly from Kristina’s intuition as creative director, but it comes from the product team [too]. And we have a culture where we’ve always welcomed ideas from anywhere in the business. Kristina was just referring to the intranet. So, we’ve got systems like that set up so that every person in the business, in stores or in the office is able to just jump online and throw in an idea, and that sends an alert to people that need to see it. The last time I looked, we’d collected something like 5000 product ideas. So way more than you could ever process!”

Lacy argues they’ve grown into marketing thought and the processes are there, but with a kikki.K twist. He’s excited that point-of-sale (POS) research has revealed 30 percent of customers over the last few weeks are unaware of the brand’s online store. The team went into rapid ideation and plans are being put into place to communicate this.“It was a bit of a jolt because when you’re so close to things, and from the generation that’s fairly digitally aware, you can kind of forget that there’s still a lot of people that aren’t.  And Neil, who is our marketing manager, said this will be great, we’ll benchmark ourselves against this, and come back and visit in six months – so [POS] is a really cost effective way of gathering data, and we use that quite regularly for different purposes – but if we find ourselves sitting around in a room and asking questions that we can’t answer, we’ll kind of fairly quickly say how could we get data around this? POS is a quick and easy way to get massive amounts of data because across 62 stores, there is thousands and thousands of transactions daily.

Internationally known

kikki.K took its first steps out of Australia by going slightly further Down Under – New Zealand. Similar time zones, distribution ease, similar consumer profile – made sense. A small step in that aforementioned big dream. The next leap toward Paris, Tokyo, Copenhagen? Singapore.ION – one of Singapore’s premiere malls on its famous Orchard Road shopping strip – approached the brand about opening in the location.

“Our country manager from New Zealand had just moved to Singapore with her partner who had a job up there… We just thought wow, this really makes sense. We had a lot of products that were very appealing to Asian shoppers,” says Lacy. “From day one, the idea was build a Swedish brand, it just so happens that Australia is our first export market.”

That goal, ‘Something kikki.K in every stylish life the world over’, is starting to look realistic.

“We’re really excited about Asia, and it’s growing so quickly. We’ve been up in China recently looking around, and we’d love to to be in Europe. It makes a lot of sense to be in the UK, it makes a lot of sense to be in Canada, and a bunch of other markets, but Asia is really exciting. Japan, things are a bit tougher there at the moment, but certainly throughout Asia we’re excited about, and we’ve had such good response. Singapore is a terrific market.”

The brand is currently defining their marketing strategy for Asia. Where PR was so effective in Australian expansion, the story is less compelling a decade on and in an international market. Lacy admits above-the-line promotion will likely be necessary in this market and they are looking for an agency.

For a brand driven by passion and a national aesthetic, the spiritual home is always going to be a goal and Karlsson admits that each time she visits Sweden – the couple spend two months there annually – she feels there should’ve been a store there yesterday. “It was always a dream to have the months to escape Melbourne winter first of all, but also to get back to the roots and think about Swedish design and be inspired by anything from nature,” confesses Karlsson. “We do all our branding photo shoots there as well, so we just got back last week where we did our campaign that’s coming up.”

Unfortunately European market realities sober the enthusiasm. But talk about a PR angle!

“It’s a bit of a brand growing up there,” says Lacy. “It would be nice to be up there soon, it’s just that you end up having to prioritise so rapidly that you look at a market like Sweden, and we think that in the whole of Scandinavia, there might be room for 15, 20 stores. And you look at other markets where there might be 100 stores, same energy, we’ll go into entering either of those, or more upside through Asia. So priority wise, that’s kind of where we’ve gone. But Sweden pops up every time as our next territory.”

 

A storm weathered

“When you start your business from scratch and you get someone to sell their house or you finance the first couple of years on credit cards, there is GFC in you since day one,” says Karlsson, incisively.I’d put it to the couple that this definitely appeared to be a case of opposites attracting, and therefore wanted to disrupt that harmony by asking them to weigh in on the concept that privately-held, owner-driven brands weathered the GFC better than publicly-held, board-driven companies. kikki.K does have a strong argument – at least for the benefits if not the benefits over: it opened 12 stores through the GFC and grew revenue more than 40 percent.Lacy sees the layers of management in bigger organisations as an issue, the motivations behind individual’s decisions being, possibly, out of kilter with the business objectives – achieve the promotion, make the bonus, don’t make a mistake.“Whereas owner operators, we’re so used to taking decisions, inherently taking risks, but you always weigh up all the information, and then you make a decision. One of the things we learned early is – and one of the best bits of advice I can give anyone going into their own business – just get good at making decisions. Get as much info as you can and then make a decision. No such thing as a bad one. If it doesn’t work out, you learn from it and you move on. So, there might be a bit of paralysis in bigger corporations, and human beings’ motivation to act in a way that’s to preserve their job or their income, or their promotion.”

Lacy says it’s something he’s hyper-aware of in order to keep their business agile. His advice for staff?“Provide systems and processes that encourage people to be speak up and be heard, and [without] fear. We’ve made so many mistakes and we’re constantly telling people: it’s okay to make mistakes, and we’ve made so many and we’ve learned from so many.”

“Because we were borne out of scarcity, I can’t remember a time of not looking really closely at cash and planning: ‘If this went off, what could we do?’ It’s only been the last couple of years where we’ve built up a really solid business with the balance sheet, that there’s a bit more margin for error, and our positions is stronger, but still we’re so careful.”

Through the GFC, an investor from a large financial institute cautioned against the expansion kikki.K was proposing.“So, we kind of went back and thought that’s interesting, these people that might know a bit about business are questioning this, so we went back and looked at it and looked at all the contingencies, and what could we do if this happened and if this got worse and that got worse, and went back and said, ‘No, guys, we’re really comfortable with this, and we monitor it weekly and can turn things off if we need to.’ So, that’s our plan, and at that point in time, we were relying on them to provide funding and to approve our plan. They didn’t approve it, and so we had to find another way to raise the money to go and do it anyway, and we did, and it was successful.”

Karlsson’s passionate single-mindedness is not borne of arrogance or stubbornness – although the latter is probably an effective tool! – and she readily confesses to benefitting from the benevolence of mentors and implores like-mindeds to do the same.“I had no idea about business, I had no idea about anything really. And being new to the country, I just went – loads of different people speaking, Craig Kimberley [of Just Jeans], Gillian Franklin [of Heat Group], Janine Ellis [of Boost Juice]. I just really I guess sought out to see speakers first of all, and I was never shy to ask lots of questions. For example, Gillian I saw speak about raising money for her business and sharing her experience in one of her talks. That was one of my issues obviously, to raise money to open lots of stores. So, I asked her if I could see her over coffee, and she said yes, and successful people tend to be very happy sharing their story of success, and want to help others… And also I think in terms of mentors, realise that you might need more than one mentor; there’s mentors for money, there’s mentors for creativity, for marketing, for retail. So, having different mentors I think is quite important.”

“Could I just add something to that, that I reckon is a real practical one,” interjects Lacy. “Again, thinking about it, it is common sense, but just make sure that you really respect somebody’s time. So, we would always take along a gift, we would always say, ‘I know you’re probably really busy. Is it possible to catch you at lunch? How about I bring a sandwich for you?’.

”What I’ve taken from my time with the pair on mentors is select those of achievements you’d like to make rather than suits you’d like to wear. Corporate financial institutions won’t back your expansion plan when the red lights are going off around them (and maybe even when the green ones are!).

Or as Lacy eloquently put it, “They didn’t believe, we believed.”

How I like to think of you reading these profiles is in a moment of escape at your favourite cafe, hopefully occasionally excited enough to spill a drink across the table; as my lunch partner was. And I’m sure my experience with her brand is one that Karlsson hopes is common, reaching inspired for that tactile, thought recording device. Only in her dream, a Swedish hand is seeking the intellectual relief of that soft, grey, safe, felt.