Cafe Press Goes "Kiosks" On Campus

Cafe Press, dot com company that provides customization services and offers to create storefronts for anyone; its a $127 million dollar business that promotes its self as "...A key differentiator of our business model is our ability to profitably produce customized merchandise in small quantities on a when-ordered basis."  

The reality is while their sales fluctuate from year to year, quarter to quarter, their profitability swings wildly between profitability and staggering losses.

Here is a video where the CEO explains the company much better than I ever could:

CafePress, About Us from CafePress on Vimeo.

Now, this market is filled with a lot of competitors, Zazzle and Spreadshirt, being the most obvious, but the reality is every town has a screen printer who will provide the same services and the internet is chock full of promotional product companies that will fill in whatever else you want besides tee shirts.

At some point you have to differentiate yourself  from your competition in a meaningful way, right now Cafe Press is:

          * A company with over 300 million products (that is designs) a consumer can pick from.
          * These 300 million designs can be ordered on over 600 product SKU's (from apparel and
             drinkware to posters, electronic accessories, and more....
          * They have over 2 million shops and they receive over 135,000 new designs every week.
          * If by some odd chance you cannot find what you want you can create your own with
             there online design tool.
          * Over 11 million unique visitors a month to their website and they ship 6 million products
             year.

In 2010 Cafe Press had 2 million customers, shipped 2.7 million orders, with an average order size of $47.

So, to grow their business they are testing a "kiosk" at Western Kentucky University.  Now, for the retailers perspective this is not a bad idea; a customer comes in, sits down at a computer in the kiosk and designs and orders something.  They then pay the retailer and in a few days the consumer can return to the bookstore and pick up their order.  It brings the retailer a second visit from the consumer and it saves the consumer shipping.

But, why would anyone, with a computer and internet access, feel compelled to visit a college bookstore to design and place an order with Cafe Press?

If a company, such as Shapeways, were to establish kiosks on college campuses that would be a brilliant idea because they have something that is relatively new to the consumer market, its something that is not all that well known nor understood, thus the exposure on college campuses would make logical sense.

But for a company like Cafe Press, it really seems like nothing more than a duplication of something they already provide.  Now, Western Kentucky University's bookstore, has decided to take this Cafe Press Kiosk and create their own, on campus, "Threadless" community by holding weekly tee shirt design contests.

Thus the concept of a "kiosk" or a "store within a store" is basically the first volley of Cafe Press to create a Threadless community on every college campus where it can gain entry to the college bookstore!  Campus groups competing in design contests against each other which will eventually lead to college design teams competing against other college design teams!  Obviously, Western Kentucky University was chosen because Cafe Press has offices and manufacturing facilities in Louisville, Kentucky and Western is the only university in the state that has an independent bookstore.

The reality is that its not the kiosk that will create the demand but rather the community that creates the demand; is there an existing community that wants this opportunity?  If there is its probably safe to assume that they are already part of the Threadless community and right now there is no established Threadfan community in Bowling Green, Kentucky.

I am a big fan of interactive kiosks, shops within shops, and pop up shops, and I believe that internet brands and retailers will eventually have to develop the ability to integrate on line with off line.  But, I think Cafe Press needs to to realize that a kiosk can also be nothing more than a duplication of something readily available without a more obvious strategy; and they need a strategy which reduces their products/designs, reduces their SKU's, and increases the dollar value of their average order.  

Ecommerce Matures

In 2009 retail sales, excluding food and motor vehicles, totaled $3.6 trillion.  While everyone focuses on the dramatic gains in online retail, or e-commerce, which soared from $42 billion in annual sales in 2002 to $197 billion in 2011, the reality is that even with its soaring growth, e-commerce is still a mere pittance of total consumer retail spending.

When you realize that Amazon, the Walmart of the internet, makes up a third of all online retail, then the stark reality of the potential of e-commerce is quite obvious.  When you realize that 36% of all units sold by Amazon are actually via third party vendors you cannot help but wonder if Amazon is an online retailer or rather becoming a retail "community."

Of course there will be a continued push to expand the concept of retail further and further into new areas, and we have the continued efforts to champion the concepts of  social commerce or "f-commerce," mobile commerce or "m-commerce," and the constant chatter of frictionless payments and a host of other ideas to continue to champion ideas over the existing brick and mortar retail grid.  Oh, and we will continue to hear all the predictions of the demise of traditional retail and the idea that consumer expectations can only be met by technology.

There is no doubt that traditional retail, brick and mortar retail, big box retailers, and department stores all have a myriad of issues and shortcomings, but that does not negate the fundamental shortcoming of e-commerce:  Which is the "experience" of retail; as e-commerce matures, and if it is to continue its growth patterns, online retailers will have to find a way to capture the "experience" of retail.  

We will focus on this with our T Shirts on Tuesday series:

          March 6th:    Cafe Press Goes "Kiosks" On Campus

      

          March 13th:  Threadless Becomes A "Brand"

          March 20th:  An "Indie" Superstore

There really is no reason to discuss ideas when we have the efforts of some of the leading ecommerce innovation leaders pointing the direction to the future.